Difference between Management and Financial Accounts

Difference between Management and
financial accounts & the usefulness of
the financial information to users

TABLE OF CONTENT
Explaining the difference b/w FA & MA....................................................................................3
Users of financial information.....................................................................................................4
REFERENCES................................................................................................................................6

Explaining the difference b/w FA & MA
MA is the field of an accounting that assesses and facilitates the cost related information
to internal parties with an objective to plan, making decision and controlling. MA refers to the
accounting information that is been developed for the managers within the corporations. It is
defined as the practice of identifying, accumulating, measuring, preparing, analyzing,
interpreting and communicating information that is used by the management for planning,
evaluating and ensuring effective controlling within the firm & to ensure adequate use of
accountability for its own resources (Schmidt, 2017). It is concerned with providing information
to the managers for directing and handling the business operations. On the contrary, FA relates
with facilitating information to the stockholders, investors and creditors outside the organization.
MA provides an essential data for smooth functioning of the company while FA facilitates the
scorecard through the use of which an entity’s past year’s performance is been judged.
Point of contrast FA MA
Objectives The main aim of the financial
accounting is to disclose end
results relating to profits and
financial health of the company
on a specific date.
However, the main purpose of
MA I to enable the managers in
planning and setting up
appropriate goals with its
evaluation by providing them
with useful information.
Audience FA produces an information
which is been used by the
external parties like lenders and
the shareholders.
On other hand, MA produces
information which is used within
the company by the employees
and the managers (Bai, 2019).
Optional It is legally compulsory for the
firm to formulate financial
reports and presenting them to
the external users.
MA reports are not counted as
legal requirement so there is an
option with the managers to
prepare the MA reports or not.
Segment reporting It pertains to an overall
organization. Some figures might
be broken out for important units
of the business.
It looks to each and every
department along with an entire
organization.
Focus It emphasize on the history and On other note, it focuses on the