Difference Between Managerial Accounting And Financial Accounting

 Managerial accounting is defined as the activities carried out in a firm to provide its managers and other employees with financial and related information to help them make strategic, organizational, and operational decisions.

Management accounting: It deals with analysis and construal of financial verification so that organization can take assured decisions on venture plans, revisit to investors and dividend policy.

Managerial Accounting reports are primarily used by supervisors, line managers, process owners, as well as executives, to gain a better understanding of the current financial and operational health of the organization. (Internal)

With the complex system where there were wide ranges of product which include physical assets, it had reached the limits of accounting. The company had taken fully advantage of this to make balance sheet become a perfect picture of company’s performance. They used mark-to-market method of accounting, which state that “once a long-term contract was signed, the present value of the stream of future inflows under the contract was recognized as revenues and the present value of the expected cost of fulfilling the contract were expensed”. (Pauls, 2003) Therefore, the future profit had been account even the real cash flow had not come to the company yet.

A) focuses on estimating future revenues, costs, and other measures to forecast activities and their results

This case study analysis provides information obtained from Mainfreight Limited (MFT), regarding the presentation and disclosure of information in the financial statements, the accompanying notes and accounting policies of MFT Ltd for the year 2014. This essay will pay specific interest to the application of the conceptual framework of accounting to the relevant Accounting Standards (NZ IAS 1, NZ IAS 7, NZ IAS 8 and NZ IAS 10). The report will comment on why it is essential to regulate external financial reporting by Mainfreight. The second part will discuss the role of conceptual framework to accounting standards in external financial reporting in New Zealand. Thirdly, analyze the relevant accounting standards prescribe to the presentation and disclosure of information in the Statement of Changes in Equity. Fourthly, the extent of application of management judgement for the estimates for items disclosed to Mainfreight financial statements. Lastly, comment on some issues that ascend from application of management judgements in which, items are disclosed in the financial statements.

Accounting is a way of measuring a business 's financial performance through maintaining records and analyzing them. Financial accounting system produces reports that are generally intended for external stakeholders to evaluate a business. Management accounting is used to provide internal information that management uses in order to assess performance toward goals and objectives.

The purpose of managerial accounting is to provide useful information to internal managers to help them make decisions that arise as they manage people, projects, products, company divisions or segments of the business.

Managerial accounting is defined as the process of identifying, measuring, analyzing, understanding and communicating information for companies set goals. This type of accounting is also referred to as cost accounting. There are many differences between managerial and financial accounting. Managerial accounting is mostly aimed at aiding managers within the organization to make decisions, while financial accounting is aimed at providing information to people that are not in the organization.

A major difference between financial accounting and managerial accounting is their differing uses in regards to present and future data for decision-making. Financial accountants prepare data from transactions that have already occurred and managerial accountants prepare statements in regards to future decision making for their company. According to countingtools.com, the economy is always changing and not everything can be predicted, therefore, managerial accounting could only be useful to a certain degree.

The similarity and differences between financial and managerial accounting, Management accounting is only used for internal operations and the financial is more external which is the overall financial picture and data collected by an organization that may have accountability towards the public, IRS and partners. Both are similar functions, but one is perhaps more in depth. The Target company purpose is design the show, review the project, inputs and outputs, expenses, and review all necessary steps involved with designing the shoes.

Accounting is used to manage the finance of the business. It calculates cost, records financial transaction and calculates profit by the business in the end of the finance year.

Management accounting uses financial information in a certain way that can help management with planning, decision making and control. In contrast to financial planning, managerial accounting provides helpful information to company managers so that they can control and plan company business activities. Cost accounting deals with pricing and stock valuation, while decision making deals with both the short and long-term decisions of the business (Jones, 2006).

According to Will S, Ray H, & Eric E.N. (2009), management accounting is a branch of accounting that is concerned with providing information to managers who direct and control the firm’s operations. Management directing function seeks to effectively use both the human and raw material wealth of a firm to achieve organizational set objectives on routine basis. Controlling function is the art of tele-guarding the activities of the organization to consistently fall in line with set objectives. Management accounting achieves this function through effective budgeting.

According to Obaidullah Jan, Financial accounting is a system that accumulates, processes and reports information about an entity 's performance (i.e. profit or loss), its financial position (i.e. assets, liabilities and shareholders ' equity) and changes in financial position. Every entity, whether for-profit or not-for-profit, aims at creating maximum value for its stakeholders. The goal of maximum value addition is best achieved when there is a mechanism to monitor the management and the board of directors. Financial accounting helps in such monitoring by providing relevant, reliable and timely information to the stakeholders, (Jan, Financial accounting, 2013).