Financial and Management Accounting



Financial and Management Accounting

The field of financial accounting focuses on the making and researching related to financial statement of organizations in order to make necessary business decisions. The stakeholders like investors, creditors, suppliers, debtors, government agencies, are mostly interested in financial information of an organization regarding its financial performance. The information from financial accounting is usually utilized by the stakeholders that are outside the organization and prepared by the financial and accounting managers. The main agenda of financial accounting is to reduce the issue of asymmetric information from the market and cater agent principal problem. The data utilized in financial accounting is predicted to be independent and provable because managers require this information to be relevant enough for estimating future plans and controls (Accounting Coach, n.d.).

Management accounting focuses on the accounting information that is presented in a form that helps financial managers to make informed business decisions that enhances the managerial activities and controlling functions within the organization. Managerial accounting reports and statements are more future oriented as it involves planning and on the other hand, financial accounting information is past oriented as it's focus is on providing brief overview of past financial performance of the business. The reports and cost related information made as per the concepts of managerial accounting are primarily used by management of the organization for the purpose of making plans, decisions and implementing control measures. However, both concepts utilize the same sort of financial information and data (Accounting for Management, 2012).

Accuracy is considered expensive as it consumes time and resources, and less significant while making managerial accounting decisions and reports but this factor is significant for preparing financial accounting reports and statements. The managerial accounting emphasizes on non numeric or monetary data such as products customers are interested in, employee satisfaction level ...