Which activity is a major function of management accounting?

Management accounting primarily focuses on providing information and analysis to internal management for decision-making purposes. One of its major functions is evaluating operational efficiency and cost-effectiveness. This involves analyzing various aspects of a company's operations to identify areas for improvement, assess performance against budgets, and evaluate whether resources are being allocated in the most beneficial manner. Through methods such as variance analysis, cost-volume-profit analysis, and performance metrics, management accountants help managers make informed decisions that can enhance the overall effectiveness and efficiency of the organization's operations.

In contrast, the other options primarily focus on functions outside the core responsibilities of management accounting. Ensuring compliance with tax laws and conducting audits for regulatory purposes are typically associated with financial accounting and auditing functions rather than management accounting. Preparing financial statements for external reporting is a fundamental aspect of financial accounting, aimed at providing financial information to external stakeholders rather than internal management. Therefore, option B is the most aligned with the primary activities of management accounting.