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Financial and Management Accounting: The Contribution to Effective Business and Management
Finance & Accounting
Pages 12 (3012 words)
FINANCIAL AND MANAGEMENT ACCOUNTING: THE CONTRIBUTION TO EFFECTIVE BUSINESS MANAGEMENT Name Institution Finance and Accounting Tutor Date Introduction Is there a difference between management accounting and financial accounting and does it benefit a business to incorporate both strategies in business?
The management accountant envisages the future of an organization and evaluates the performance of the organization with the set standards hence achieving his controlling function (Warren, Reeve and Duchae, 2008, p. 729). Financial accounting is an external financial initiative. A financial accountant prepares financial accounts for the scrutiny of members in house to the organization and to other external members. The financial accountant is responsible to the stakeholders of the business: shareholders, employees, creditors, debtors, customers, and the community it serves. With this genesis, this research essay will be aimed at outlining the differences between financial and management accounting, delineating their benefits and limitations and consequently explaining their contribution to effective business management (Stickney, et al., 2009, p. 100). Differences between Financial Accounting and Management Accounting To begin with, the difference between financial accounting and management accounting will be delineated in regard to the requirement for an organization to have either or both. Financial accounting is mandatory for any company seeking to be registered under the company’s Act. This is since each company needs to present the financial prospect of the organization in the next five years after commencing business. ...
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