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Financial Accountants vs Managerial Accountants - Coursework Example
Finance & Accounting
Pages 3 (753 words)
Financial Accountants vs Managerial Accountants What are the differences between financial and managerial accounting? The two primary objectives of a business are to earn a profit and to remain solvent. Solvency of a firm represents the potential of the firm to finance its debt and pay the bills…
Financial accounting is useful for those who belong to outside of a company or organization (Stickney, Weil, Schipper and Francis, 2009). Financial accounting involves some predictive values which acts as the indicator to the investors who wish to invest in the concerned company. On the other hand, management accounting primarily deals with confidential reports regarding to finance. The reports are generated with the help of some statistical methods and other scientific rules. The generated monetary values are then used for the purpose of decision making. Management accounting is primarily forward looking instead to being historical. Financial accounting serves its utility to the shareholders while management accounting provides information to the top management for effective functioning of the business. The financial accounting statements are required by law while management accounting is exempted. There are some specific formats and standards are necessary for statutory accounts like the International Financial Reporting Standards. The entire organization is covered in financial accounting while the boundary of management accounting can be restricted to only some particular products (University of North Florida, n.d.). ...
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