Does Managerial Accounting use financial statements?
John Johnson
Updated on February 21, 2026
Managerial accounting is used for internal purposes, while financial accounting provides financial information based on accounting standards….How managerial and financial accounting differ.
| Managerial Accounting | Financial Accounting |
|---|---|
| Focuses on specific management needs | Reports on the entire company |
What are financial statements in Management accounting?
Financial statements are written records that convey the business activities and the financial performance of a company. Financial statements are often audited by government agencies, accountants, firms, etc. to ensure accuracy and for tax, financing, or investing purposes.
How does financial accounting help management accounting?
Financial accounting helps managers create budgets, understand public perception, track efficiency, analyze product performance, and develop short- and long-term strategies, among several other decisions aided by accounting figures.
What is the main purpose of managerial accounting?
The main objective of managerial accounting is to produce useful information for a company’s internal use. Business managers collect information that encourages strategic planning, helps them set realistic goals, and encourages an efficient directing of company resources.
Why does a company have to comply with GAAP?
Financial accounting must conform to certain standards, in accordance with GAAP as a requisite for maintaining their publicly traded status. Most other companies in the U.S. conform to GAAP in order to meet debt covenants often required by financial institutions offering lines of credit.
Why is managerial accounting not for external use?
Because managerial accounting is not for external users, it can be modified to meet the needs of its intended users. This may vary considerably by company or even by department within a company.
What are the main objectives of financial accounting?
Managerial and Financial Accounting Objectives. The main objective of managerial accounting is to produce useful information for a company’s internal use. Business managers collect information that encourages strategic planning, helps them set realistic goals, and encourages and efficient directing of company resources.
