The management group needs detailed financial information in order to help them make relevant economic decisions in achieving the goals and targets of the firm.
The internal financial reports are not governed by the standards in financial accounting and reporting, and auditing.
Normally, it is the management accountants who focus in providing internal financial reports. Examples of such reports are variance analysis, opex and capex monitoring reports, sales and distribution reports, cost behavior trending and analysis, and other internal reports relating to management uses and purposes.
The management accountants are those who assist in the corporate planning and profit planning, and translate the corporate plans into budgeting terms. They are those who monitors and interprets the differences between the budgeted and actual figures thru variance analysis reports.
Management group also uses the financial information for target setting and and metrics for key performance indicators and administration of incentives to participating employees in attaining the targets.
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