I just reviewed our most recent financial statements, and I have noticed we did not do as well as we had planned. I would like to look more closely at the profitability of each of our products to determine exactly what happened, but I dont have this information in the financial statements. Is there a reason we dont include this in the financial statements?

Accountant:

Yes, the financial statements are prepared following Generally Accepted Accounting Principles (GAAP) and are intended for outside users, such as owners, banks, and suppliers. GAAP does not require us to disclose profitability by product, and we prefer not to make this information public. Product profitability information stays in-house and its prepared by our managerial accountant.

Required:

Its clear from the above conversation that financial accounting focuses on reporting to outsiders while managerial accounting focuses on reporting to inside users.

1. Explain in detail the role and functions of a Management Accountant in an organization (12 marks)

2. Discuss specific characteristic differences we would expect to see in managerial accounting information as opposed to financial accounting information. (8 marks)

Assignment format

• Presentation: The assignment should be well presented, well typed with an introduction and a conclusion including page numbers
• Word limit: Your assignment must not exceed 3,000 words.
• Text: All text must be justified at the margin.
• References: At least 5 sources of references must be included.