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Management accounting refers to the process of preparing management reports and accounts that provide financial and statistical information to managers for decision-making, planning, and control within an organization. Unlike financial accounting, which focuses on creating financial statements for external stakeholders like investors and regulators, management accounting is designed for internal use, helping managers make informed operational decisions.

The primary function of management accounting is to support managers in their decision-making processes. It involves the collection, analysis, and interpretation of financial data, which is then used to formulate strategies, track performance, and ensure the efficient use of resources. Management accounting also emphasizes forward-looking data, focusing on forecasting, budgeting, and analysis of future trends rather than merely recording past performance.

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