The Difference Between Financial Accounting and Management Accounting
This article is useful for those who would like to know a little more of the difference between Financial Accounting and Management Accounting.
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Financial Accounting |
Management Accounting |
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Prepared more for external parties. |
Prepared specifically for internal management uses. |
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Subjected to GAAP |
No Need. |
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Mainly on historical events like reports on past events on how income was earned, financial status like the position on the assets and liabilities at a certain point of time. |
More forward looking – looking at relevant cost for decision making, budgeting and many others. |
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Financial accounting for a limited company is a legal requirement. Subject to audits and other strict regulatory requirements |
Not made compulsory by law and audits, etc are not needed. |
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Financial accounting is applicable towards the activities of the whole organization. |
More segmented to individual department like purchasing, marketing,etc |
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