Management Accounting - The 'Raw Material' cost as a 'Variable Cost' Essay

Management Accounting - The 'Raw Material' cost as a 'Variable Cost' - Essay Example The job responsibilities of financial accountants is to ensure that all financial transactions are recorded into the books of accounts, are valued appropriately, and all transactions are reflected in the statements. Generally Accepted Accounting Principles (GAAP) are used by financial accountants as a benchmark standard to develop financial statements (Wikipedia, 2007). Public companies are legally required to develop and publish financial statements. In contrast, Managerial Accounting focuses on the internal issues which are required by management to make informed decisions about business processes. These also provide the management with an insight into business functions' efficiency and effectiveness and provide valuable information about operations of the system of internal controls. The managerial accounting information is not required to be disclosed to public in contrast to the financial accounting reports; rather the reports produced by managerial accounting function are normally classified as 'confidential' and are for internal use only (Wikipedia, 2007). A few reports developed by managerial accounting function include inventory reports, product costi