Managerial accounting also known as cost accounting provides economic and financial information for the internal users of the financial statements.  For example, department heads, shift leaders and the human resources department.

 

Managerial accounting is used in all three types of businesses: service, merchandising and manufacturing.  It is a needed accounting skill in all types of business entities (sole proprietorships,  flow through entities and corporations).  Both non-for profit and for profit businesses also have a need for managerial accountants.

 

The reports produced by managerial accountants are required and updated much more frequently than the financial statements produced by financial accountants.   The managerial accountant using ratio analysis and variance analysis analyzes results of operations.

 

Users of the managerial accountant’s financial information:

 

a. All levels of management to for planning and to establish objectives.

 

b. Human Resources uses pertain to have the right mix of employees to keep the business a smooth-running operation.

 

c. Department heads use the report to measure the success or failure of staying within budget.

 

 

Managerial accountants look to the Institute of Management Accountants for  guidance for in carrying out their accounting duties.

 

Managerial accountants code of ethics is contained in the Standards of Ethical Conduct for Management Accountants.

 

The four areas of ethical concern for managerial accountants:

Competence,

Confidentiality

Integrity,

Objectivity