Assessing Differences between Management and Financial Accounts

Business Finance

TABLE OF CONTENTS
Assessing key differences between management accounts & financial accounts and present
their usefulness to the concerned users........................................................................................3
REFERENCES................................................................................................................................7

Assessing key differences between management accounts & financial accounts and present their
usefulness to the concerned users
Management accounting: This may be served as a practice which focuses on identifying,
evaluating, analyzing and communicating monetary information to the managers that associated
with organizational goals. The main objective of managerial accounting is to assist high
management team in strategic decision making. Hence, MA presents accounting information
which helps manager in developing competent strategic and policy framework in relation to day
to day business activities. Managerial accounting is highly effectual which contributes in
effectual planning, organizing, directing and controlling (Alawattage and Wickramasinghe,
2018). MA reports are highly significant which serves information about cost, resource
utilization etc. By preparing this, firm can identify underperformed areas and thereby would
become able to take appropriate decision for performance improvement. In addition to this, it
also helps in taking decision about labor and other aspects which in turn facilitates optimum
utilization of financial resources.
Financial accounting: It may be defined as a field of accounting which assists in
classifying, analyzing, summarizing and recording monetary transactions. Financial accounting
helps in providing accurate view or picture of company’s monetary affairs (Schroeder, Clark and
Cathey, 2019). FA mainly includes preparation of final accounts which in turn available for
public usage.
Difference between management and financial accounting is enumerated below:
Basis of difference Management accounting Financial accounting
Motive It emphasizes on providing
higher management team with
specific information that can
be used for planning, setting
goals and evaluating the same.
The main objective of this
accounting field is t disclose
information about company’s
financial position and
performance.
Stakeholders Information derived through
MA is used by managers and
In this, users include external
parties namely shareholders,