Management accounting information and reports do not have to follow set principles or rules such as GAAP but should be useful to its audience and meet the cost/benefit test.

Question

Quizplus · Accepted Answer

Management accounting information and reports are flexible and tailored to meet the specific needs of management, and therefore do not have to strictly adhere to GAAP principles or other accounting standards. The key consideration is whether the information is relevant, accurate, timely, and useful for decision-making purposes, while also being cost-effective to produce.

Management Accounting Information and Reports Do Not Have to Follow