fincai accounting management accounting

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I am assuming you are asking about the difference between Financial Accounting and Management accounting. If you are asking about something else, please clearly mention in the comments section, I will help you specifically then.

Difference between Financial Accounting(F.A) and Management Accounting(M.A)-

• Objective

F.A- The main objectives of financial accounting are to disclose the end results of the business, and the financial condition of the business on a particular date.

M.A- The main objective of managerial accounting is to help management by providing information that is used to plan, set goals and evaluate these goals.

• Audience

F.A- Financial accounting produces information that is used by external parties, such as shareholders and lenders.

M.A- Managerial accounting produces information that is used within an organization, by managers and employees.

• Legal Requirement

F.A- It is legally required to prepare financial accounting reports and share them with investors.

M.A- Managerial accounting reports are not legally required.

• Segment Reporting

F.A- Pertains to the entire organization. Certain figures may be broken out for materially significant business units.

M.A- Pertains to individual departments in addition to the entire organization.

• Focus

F.A- Financial accounting focuses on history; reports on the prior quarter or year.

M.A- Managerial accounting focuses on the present and forecasts for the future.

• Format

F.A- Financial Accounts are reported in a specific format, so that different organizations can be easily compared.

M.A- Format is informal and is on a per department/company basis as needed.

• Rules

F.A- Rules in financial accounting are prescribed by standards such as GAAP or IFRS. (https://www.diffen.com/difference/GAAP_vs_IFRS) There are legal requirements for companies to follow financial accounting standards.

M.A- Managerial accounting reports are only used internally within the organization; so they are not subject to the legal requirements that financial accounts are.

• Reporting frequency and Duration

F.A- (As defined) annually, semi-annually, quarterly, yearly.

M.A- (As needed) daily, weekly, monthly.

• Information

F.A- Monetary, verifiable information.

M.A- Monetary and company goal driven information.