Managerial accounting reporting by a public firm is required to follow the rules of GAAP. a. True
b. False

b. False

Explanation:

Only external reports which are used by various stakeholders (Investors, customers, tax authorities, banks, suppliers etc.) are required to follow reporting framework laid out in GAAP.

However, for Managerial reporting , no strict requirements are set for the preparation of reports as the management use various reporting styles to manage business performance. An example is the use of Variable Costing Income Statements that show the relationship between outputs and costs resulting from different activity levels.