Financial accounting has its focus on the financial statements which are distributed to stockholders, lenders, financial analysts, and others outside of the company.
Managerial accounting has its focus on providing information within the company so that its management can operate the company more effectively.
While managers are responsible for the efficient operation of a business, accountants are responsible for reporting the results of that effort to the investment community. With these two key points in mind, the difference between financial and managerial accounting is much easier to understand.
Financial and Managerial Accounting Differences
Reporting of Results
Plan, Control, Improve Operations
Regulators, Investors, Creditors (External)
Line Managers, Executives (Internal)
Historical, Actual Results
Plans, Actual Results, and Forecasts
Prescribed by Regulators
Based on Business Needs
Company / Enterprise Level
Down to Individual Operating Unit
Mar 8th, 2015
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