Financial and Managerial Accounting

628 Words3 Pages
Both financial and managerial accounting analyze economic data, however the major differences between the two strands include; user groups, information type, regulatory control and reporting frequency (Atrill and McLaney, 2012) User Groups: Financial accounting mostly provides information for external stakeholders such as shareholders, lending institutions, prospective investors and creditors, whereas managerial accounting mostly make available information for internal users such as managers and the executives of the organization. Information Type: Financial accounting reports mostly provide broad information about the company which reveals the overall performance or the financial health of the company whereas managerial accounting reports focus on more detailed and specific information that may be both financial and non-financial. These reports enable the users to review the company’s past performance, current situation and help predict future financial transactions. Regulatory Control: Financial accounting is controlled by various regulatory bodies. Financial reports tend to be standardized in content and format, they are to be precise and adhere to the Generally Accepted Accounting Principles (GAAP) in order to protect public interest (Barry, 2006). Managerial accounting is intended only for internal users and the reports generated are designed to meet the needs of the managers. Reporting Frequency: Financial accounting is based on periodic reporting of past performance
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