Management Accounting and Financial Accounting Essay

The differences between caution business relationship and fiscal accounting include1 1. Management accounting provides information to people at heart an organization musical composition pecuniary accounting is mainly for those outside it, much(prenominal)(prenominal) as shareholders 2. financial accounting is required by law while management accounting is not. Specific standards and formats may be required for statutory accounts such as in the I.A.S International score Standard deep down Europe. 3. Financial accounting covers the entire organization while management accounting may be concerned with particular products or cost centres. managerial accounting is apply primarily by those within a guild or organization. Reports can be generated for any period of time such as daily, weekly or monthly.Reports are considered to be future looking for and have forecasting value to those within the company. Financial accounting is used primarily by those outside of a company or orga nization. Financial reports are usually created for a set period of time, such as a fiscal year or period. Financial reports are historically factual and have predictive value to those who wish to make financial endings or investments in a company. Management Accounting is the branch of Accounting that deals primarily with confidential financial reports for the exclusive use of top management within an organization. These reports are prepared utilizing scientific and statistical methods to arrive at certain monetary values which are then used for decision making. Such reports may include* Sales Forecasting reports* Budget synopsis and comparative analysis* Feasibility studies* Merger and consolidation reportsFinancial Accounting, on the other hand, concentrates on the production of financial reports, including the basic reporting requirements of profitability, liquidity, solvency and stability. Reports of this spirit can be accessed by internal and external users such as the shar eholders, the banks and the creditors.