Difference between Management and Financial Accounting

Business Finance

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

INTRODUCTION
The core purpose of accounting is to record the business transactions and then
analysing and interpreting the same for better decision making. With the use of accounting
information, financial reports of the business is prepared which are used by both internal and
external users. In this report, a distinction is drawn between management accounts and
financial accounts. It also covers the usefulness of the financial information to the users of it.
MAIN BODY
Difference between management and financial accounting
Basis of comparison Management accounting Financial accounting
Meaning It is the accounting system
which provides all the
important and relevant
information to the managers
for making policies and
plans.
Financial accounting
focusses on the preparation
of the financial statement
and other key document of
an organization in order to
provide financial
information to the interested
parties.
Objective The objective is to provide
assistance to the
management in its business
planning and
implementation process
(Moretto, 2019).
In financial accounting, the
objective is to provide
relevant information to the
users such as investors,
financial institutions,
creditors etc.
Nature of information It takes into account both
financial and non-financial
information which can be
used by the management in
its planning process.
It considers only financial
information for preparing
annual reports.