Memorandum

Memorandum

To: Sally Jones

From: ABC

Date: 15th October, 2012

Subject: Difference and Similarity between the Managerial and Financial Accounting

Reports from financial accounting are useful for the external parties, which includes creditors and shareholders. On the other hand, managerial accounting is useful for managers of the company.

The main purposes of accounting differences, between the accounting and financial management are as they relate to the type of clientele, dates, types of information and scope. Financial accounting is considered as the reports for external clients or stakeholders, i.e. shareholders, creditors, tax authorities, etc. For management accounting, it is considered a domestic clientele, i.e. employees, managers and executives of the company or organization or.

The purposes of financial accounting report are on past performance for external customers and establish contracts with business owners and creditors. The management accounting report informs internal decisions that are taken by managers and employees, and establish feedback and control on operating performance and contract owners and creditors.

As for dates, financial accounting considers historical periods and arrears; whereas, managerial accounting considers the current period and prioritizes future orientations.

In financial accounting, the restriction is regulated and directed by rules and principles of accounting and governmental authorities. In managerial accounting, the restriction need not be regulated, and information systems are determined by management to solve strategic and operational problems.

The information determined by the financial accounting is only for financial measures. The coming of managerial accounting refers to the measurement of physical and operational processes, technology, suppliers and rivals. The information derived from the financial accounts is objective, auditable, reliable and consistent. As coming of managerial accounting, these are subject to the judgment of its value and need to be relevant and accurate.

Scope is the set of all products included in a project, the services required to implement these products and the expected result. In financial accounting, the scope provides a description of everything that needs to be done so that the goals are achieved with specified features and functions. In managerial accounting, informs the decisions and legal actions.

The target audience of financial accounting (external customers) needs to be able to assess the financial situation of the company or organization, but do not need detailed and specific information such as, for example, those relating to the product line. For external customers, understand how administrators get the return that shareholders require is not very important that is, if the return is actually guaranteed. It is up to the ...