What is the primary purpose of managerial accounting?

The primary purpose of managerial accounting is to provide detailed financial information for internal decision-making. Managerial accounting focuses on generating reports and analyses that help managers and other internal stakeholders make informed business decisions. This includes budgeting, forecasting, and various performance metrics that are tailored to an organization's specific needs.

In contrast, preparing tax returns pertains primarily to external financial reporting and compliance with government regulations, which is not the main focus of managerial accounting. Reporting financial performance to shareholders is also an aspect of external financial reporting, aligning more closely with financial accounting rather than managerial accounting. Conducting audits and ensuring compliance are crucial functions but typically fall under external accounting and regulatory practices, rather than the internal orientation of managerial accounting.

Therefore, the provision of detailed financial insights specifically for internal decision-making distinguishes managerial accounting as a critical function within an organization's financial management framework.