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Financial Accounting is easy as compared to Management Accounting
Management accounting is meant for company management based on financial data.It is meant for management use (internal).Financial accounting throws light on the financial position of a company to ousiders, shareholders.
Financial accounting deals with system of recording, classifying and summarizing in order to deliver financial statements.
Financial management reports are mostly for internal uses, and are prepared by taking information's from the financial statements and comparing them with allocated budget and analyzing the information's for decision making and for control purposes.
Financial Accounting is:
For internal and external stakeholders
Subject to Statutory Auditing
Reports contents are defined by IFRS / GAAP
While Management Accounting is:
For internal stakeholders only
Not subject to Statutory Auditing
Reports contents are defined by the management
Managerial accounting need not follow generally accepted accounting principles (GAAP), while financial accounting must follow them
Financial accounting is used to present the financial health of an organization to its external stakeholders. Board of directors, stockholders, financial institutions and other investors are the audience for financial accounting reports.
Management or managerial accounting is used by managers to make decisions concerning the day-to-day operations of a business.
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