Managerial accounting, or management accounting, is the branch of accounting that focuses on providing information for use by internal users.
Managerial accounting focuses on providing information to internal users - the management.
Management accountants fill a staff function, providing support to top, middle, and line management.
The Controller, or Chief Management Accountant, is responsible for all accounting functions, including providing relevant information to managers.
As defined by the American Accounting Association,
"Managerial accounting involves the application of appropriate techniques and concepts in processing information to assist management in establishing plans and making rational decisions towards the achievement of the organization's objectives."
There are two broad functions in an organization: line and staff. Line function is the one that is directly involved in the core operations of the company such as sales and production. Staff function, on the other hand, provides advisory and support to the organization.
Generally, management accountants exercise staff functions. They support the company by providing information to enable decisions which are vital for the company's performance and continuity.
The Chief Management Accountant (or controller) exercises line function over his or her subordinates, and performs staff functions to the other members of the management.
The Chief Management Accountant or Controller, sometimes "Comptroller" especially in government agencies, is mainly responsible for the accounting aspects of management planning and control. The controllership department carries out the following functions:
Often compared to the controllership function is the treasurership function. Both the controller and the treasurer report directly to the company's head of finance. While the controller's functions involve internal finance and accounting, the treasurer's responsibilities involve external finance and cash functions.
The functions of the treasurer include: (1) provision of capital, (2) investor relations, (3) short-term financing, (4) banking and custody, (5) credit and collections, (6) investments, and (7) insurance.
Managerial accounting processes economic information to aid the management in making decisions. Unlike financial accounting, it is not mandatory yet is equally important. Without managerial accounting, a business would suffer in information deficiency leading to misguided decisions that are detrimental to the entity's performance or even to its existence.