Let's put managerial accounting in the larger context of accounting in general. When you think of accounting in a broad sense, you can think of three sets of books, the financial books, the management books, and the tax books. An example of the financial books is the annual report that a company files with its shareholders each year. Examples of the management books include budget reports or product profitability reports. And an example of the text books would be the company's tax return it files for income tax purposes each year with the tax authorities. Each of these sets of books has its own audience and its own objective. The financial books are targeted towards external constituents, primarily investors and creditors. These parties are trying to decide where to put their money, so they rely on these to communicate financial information about the company. The objective then, of those books, is to communicate the economic performance and financial position of the organization. The audience for the management books is an internal audience, it's management themselves. The objective of those books is to facilitate management decision making in the organization. The audience for the tax books is the tax authorities. The tax books have the objective of facilitating the collection of tax revenue by the government. So each of these sets of books has very different objectives targeted to very different audiences. So we have three very different sets of books for all the right reasons. Let's talk about the rules that companies have to follow when preparing each set of these books. The financial books must be prepared in accordance with some set of accounting standards that are relatively common among a large group of firms. For example, in the US, companies must prepare their financial statements in accordance with US GAAP, or Generally Accepted Accounting Principles. Internationally, companies may have to prepare their books in accordance with International Financial Reporting Standards, or IFRS, or a specific country GAAP. Each of those has its own authority that sets the rules and ensures that those rules are followed. The management books essentially have no rules, because management is the authority there and management pulls together that information that's relevant to the decision that it is trying to make. There are no standards that prescribe how management compiles that information. And finally, the tax books are prepared in accordance with the tax code, and of course that is enforced by the tax authority in the US, that would be the IRS, or the Internal Revenue Service. In this course, of course, we will focus on the management books.