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.

Financial Accounting	Management Accounting
Prepared more forÂ external parties.	Prepared specifically for internal management uses.
Subjected to GAAP	No Need.
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 â€“ looking at relevant cost for decision making, budgeting and many others.
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.
Financial accounting is applicable towards the activities of the whole organization.	More segmented to individual department like purchasing, marketing,etc