Financial Accounting vs Management Accounting: A Comparative Report

Desklib provides past papers and solved assignments for students. This report compares financial and management accounting.

Finance
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Table of Contents
Task 1..............................................................................................................................................3
Task 2..............................................................................................................................................4
Task 3..............................................................................................................................................5
References.......................................................................................................................................6
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Task 1
Basis Of
Comparison
Financial Accounting Management Accounting
Meaning It refers to classification, analyzing,
recording and summarizing the
financial records & statements of the
organization.
It refers to analyzing and making
decisions of the business as a whole by
the management and not just the
separate department.
Scope &
Dependency
It does not have a large scope as it is
restricted only to financial
information. Also, financial
Accounting is independent and does
not depend on management
accounting.
It has a broader scope as it covers all
the departments in the organization.
Management accounting depends on
financial accounting as well as other
departments of the organization.
(Richardson, 2017)
Usefulness &
Legal
Requirement
Financial accounting is for all
Stakeholders & has to follow the
legal requirements.
Management Accounting is only for
management and there are no legal
requirements.
Statements
prepared
Income Statement, Statement of
Cash flows
Sales Report, Comparative analysis
report
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Task 2
Capital Budgeting Statement- Timing is a major element in capital budgeting decisions as they
are future-oriented and depict the viability of the project whether the project would be viable to
start keeping in mind the future cash flows especially in manufacturing business. Thus timing in
capital budgeting statement affects the validity and communication of the aforesaid mentioned
reports (Farah, et, Al., 2018).
Cost Sheet- Statement of cost sheet depicts the cost of a particular product including the cost per
unit of such a product. Analysis of cost per unit decides whether the product should be produced
or not and is there a need for cost reduction. Thus timing is important in making cost sheet as it
depicts in the future of the particular product whether such product is produced or not.

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Task 3
Following are some of the careers and positions managerial accountants can hold in the
corporate:
 Budget Analyst- Budget analyst generally reports to finance or operation managers. The
responsibility of budget managers is to make budgets and monitor costs so that to achieve the
goals and objectives of the organization.
 Chief Financial officer (CFO)-CFO is the top level position in an organization and is into the
decision making the process of higher level and other strategic planning in consultation with the
board(Ahid, et. Al., 2012).
 Finance analyst- Finance analyst is into the finance department of the organization and is
involved in the decision regarding investment and future needs of funds including capital
budgeting decisions.
 Controller- Controller is an important position of the organization which is into the managing of
all the departments and into proper functioning of the business. Controller helps the organization
to lead to sustainable success by directing all the departments towards achieving a common goal.
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References
 Ahid, M. and Augustine, A., 2012. The roles and responsibilities of management accountants in
the era of globalization. Global Journal of Management and Business Research, 12(15).
 Farah, A. M. A., Altinkaya, Z., 2018, Capital Budgeting Decisions And Profitability In
Manufacturing Firms. IOSR Journal of Business and Management (IOSR-JBM).
 Richardson, A.J., 2017. The Relationship between Management and Financial Accounting as
Professions and Technologies of Practice. The Role of the Management Accountant: Local
Variations and Global Influences.
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