What is the main function of management accounting?

The primary function of management accounting is to assist management in planning, decision-making, and controlling operations. This involves providing relevant financial and non-financial information to managers, enabling them to make informed decisions that affect the organization's future. Management accounting focuses on analyzing costs, budgeting, forecasting, and performance evaluation, which are crucial for efficient resource management and strategic planning.

By delivering insights that help managers understand the operational and financial implications of their choices, management accounting supports effective decision-making and enhances the overall performance of the organization. This function is oriented internally, contrasting with financial accounting, which is primarily aimed at external stakeholders through the preparation of financial statements.

In the context of the other choices, while preparing external financial statements and complying with tax regulations are important, they fall under financial accounting rather than management accounting. Evaluating employee performance is a component of management practices but is not the main function of management accounting, as it encompasses a broader scope of planning and operational control. The role of management accounting is fundamentally about facilitating strategic management processes rather than focusing solely on employee assessment or external reporting.