An accounting classmate notes that adherence to GAAP is not required for managerial accounting reports. She observes,

Question:

An accounting classmate notes that adherence to is not required for managerial accounting reports. She observes, “If it’s so important for financial accounting, it seems reasonable that it would also be useful for managerial reporting.” Explain to her why it’s more important that financial accounting reports adhere to than it is for managerial accounting reports to do so. In what ways is managerial accounting different from financial accounting?

GAAP
Generally Accepted Accounting Principles (GAAP) is the accounting standard adopted by the U.S. Securities and Exchange Commission (SEC). While the SEC previously stated that it intends to move from U.S. GAAP to the International Financial Reporting Standards (IFRS), the...