process of identification, measurement, accumulation, analysis, preparation, interpretation, and communication of financial information that is used by management to plan, evaluate, and control within an organization. It is the accounting used for the planning, control, and decision-making activities of an organization. Managerial accounting is concerned with providing information to internal managers who are charged with directing, planning,and controlling operations and making a variety of management decisions. Managerial accounting can be contrasted with FINANCIAL ACCOUNTING, which is concerned with providing information, via financial statements, to stockholders, creditors, and others outside the organization. More specifically, the differences between financialand managerial accounting are summarized here:

Financial Accounting                                       Managerial Accounting
(1) Provides data for external users.                (1) Provides data for internal use.
(2) Is required by law.                                      (2) Is not mandated by law.
(3) Is subject to GAAP.                                     (3) Is not subject to GAAP.
(4) Must generate accurate and                       (4) Emphasizes relevance and
timely data. flexibility of data.
(5) Emphasizes the past.                                 (5) Has more emphasis on the
future.
(6) Looks at the business as a whole.              (6) Focuses on parts as well.
(7) Primarily stands by itself.                            (7) Draws heavily from other
disciplines such as finance,
economics, and operations
research.
(8) Is an end in itself.                                       (8) Is a means to an end.