Management and Financial Accounting

Accounting is usually seen as having two distinct strands, management, and financial accounting. Management accounting, which seeks to meet the needs of managers and financial accounting, which seeks to meet the accounting needs of all of the other users.

The difference between the two types of accounting reflects the different user groups they address. In short, the main differences are as follows:

The properties of the resulting report. Financial accounting reports tend to be general-purpose. That is, they contain financial information that will be useful for a variety of users and decisions instead of being designed specifically for the needs of a particular group or set of decisions. You can easily get accounting & compliance services.

Accounting management reports, on the other hand, often for a particular purpose. They are designed well with certain decisions in mind or a particular manager.

The financial statements provide users with a broad overview of business performance and position for a period.  Management accounting reports, however, often provide managers with enough detail to help them with specific operational decisions.

Financial reports, for many companies, subject to the accounting rules to try to ensure they are produced with content standards and in a standardized format. Legal and accounting rule setters enforce this rule.

Since the report of management accounting is for internal use only, no regulation from external sources regarding the form and content of the report. They can be designed to meet the needs of a particular manager.