What Is The Difference Between Financial Accounting And Managerial Accounting

Submitted By beaubi93
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What is the difference between Financial Accounting and Managerial Accounting? Does this imply that there are two different accounting systems being followed? Can some accountants working for a firm be designated as financial or managerial accountants, or are they all simply accountants? Does one accountant perform both financial and managerial functions? Explain and support You may perform the functions of both if your factory is a small one, but if it's a huge one you might have both accountants in the same company. Financial accounting and management accounting both prepare and analyze financial data. However, certain aspects of these two fields are very different. The various differences include the users of information, the types of information, regulatory oversight, and frequency of reporting.
Users of Information
Financial accounting and management accounting provide information to two different user groups. Financial accounting primarily provides information for external users of accounting data, such as investors and creditors. On the other hand, management accounting provides information for internal users of accounting data. Internal users include employees, managers, and executives of the company. Types of Information
The type of information required by the different user groups also differs. External users primarily rely on financial information about the company. They analyze this information in conjunction with general economic information, such as information about the industry in which the company operates. External users focus on broad information that reveals the overall performance of the company as a whole. In addition, financial accounting only reports information on financial transactions that have occurred in the past.
Internal users need to review financial information about the company, such as financial statement information. They also use non-financial information about the company, such as customer satisfaction levels and competitor data. Internal users focus on detailed information that reveals the performance of particular subunits of the company, such as divisions or departments. In addition, management