Distinction between Management and Financial Accounting

Business Finance

TABLE OF CONTENTS
INTRODUCTION......................................................................................................................3
MAIN BODY.............................................................................................................................3
Distinction between management and financial accounting..................................................3
Users of financial information...............................................................................................5
CONCLUSION..........................................................................................................................6
REFERENCES...........................................................................................................................7

INTRODUCTION
Accounting is the way toward recording the financial business exchanges and
dissecting and deciphering the outcome. It has various branches which are cost accounting,
financial and management accounting. In this report, the key distinction among the
management and financial accounting is drawn alongside significance of it to various user of
the financial information.
MAIN BODY
Distinction between management and financial accounting
Basis of comparison Management accounting Financial accounting
Aim The management accounting
information is mainly meant
for the internal management
for taking business
decisions.
The aim is to provide
relevant information to the
outside users which includes
creditors, investors, financial
institutions etc.
Regulatory requirements There is no such statutory
requirement (Singhvi and
BODHANWALA, 2018).
It is legally required to
comply with the statutory
requirements to prepare
financial accounts for all the
organizations (Hlaciuc and
et.al, 2017).
Perspective It has a future perspective. It has a historical
perspective.
Nature of information It includes both financial
and non-financial
information for preparation
of management accounting
reports.
It considers only financial
information for preparing
statements.
Governing principles In this, there is no set
guidelines for preparing the
management accounting
(MA) statements. Thus, it is
prepared on the choice of
the internal management
Financial statement is
prepared based on GAAP. It
may differ from country to
country but are more or less
the same.