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IIA-CIA-Part3 Exam - Question 105


Which of the following statements is true regarding managerial accounts?

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Correct Answer: BD

Managerial accounts are primarily designed to meet the specific needs of their users, who are typically internal management. These accounts are used for decision-making, planning, and control within the organization. Therefore, they should be tailored to provide relevant information that exclusively aids management in fulfilling their roles, unlike financial accounting which is intended for external stakeholders and needs to be verifiable by auditors.

Discussion

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superman26Option: C
Jul 18, 2021

A is wrong because MA prepared as needed B is wrong because financial accounting is verifiable by the external auditor D is wrong because should be inclusively i guess the answer is C.

yomang
Aug 4, 2021

I think it's 'D'. When it says the word 'exclusively', I think it's saying that it's only talking about the user (not excluding them - it means excluding everyone else but the users). This article pretty much sums it pretty good. A is wrong because it should be prepared as needed. B is wrong because it's not for outsiders. C is wrong because not all management members may have accounting-knowledge but they are involved in the managerial process. But 'D' is pretty much stated verbatim in the article that it SHOULD MEET THE NEEDS OF THE USER.

yomang
Aug 4, 2021

here's the article: https://www.investopedia.com/terms/m/managerialaccounting.asp#:~:text=Because%20managerial%20accounting%20is%20not%20for%20external%20users%2C,a%20percentage%20of%20units%20produced%20in%20the%20period.

IshakuOption: D
Sep 17, 2021

It can't be B

KonradKOption: D
Feb 26, 2024

It's D!