What is the difference between financial accounting and management accounting?

Management Accounting is more concerned with operational reports, which are only distributed within a company Standards and it is for internal purposes. Whereas Financial Accounting must comply with various Accounting standards and other regulations.

Management accounting refers to the activity based accounting i-e accounting cost related to different activities e.g from raw material to finished goods.

Financial accouting refers to the over all process from the beging as raising capital to the execution of project the recording , analysing,summarizing,and evaluating that how does the result of project after evaluation effecty the company over all image.

Management Accounting information: financial and operating data about an organization's activities, processes, operating units, products, services, and customers:e.g., the calculated cost of aproduct, an activity, or department in a recent time period.

Management Accounting systems provide information to managers and employees within an organization.

Financial Accounting : the process of producing financial statements for external constituenciespepole outside the organization, such as shareholders, creditors, and governmental authorities. this process is heavily constrained by standardsetting, regulatory, and tax authorities and the auditing requirements of independent accountants.

Financial Accounting reports,in contrast, communicate economic information to individuals and organizations that are external to the direct operations of a company, such as shareholders, creditors,regulators, and governmental tax autnorities

> Financial Accounting (FA) concerned with reporting to stakeholders who are not directly involved in the operations of a company, i.e. shareholders, investors, government authorities etc.

> Management Accounting (MA) deals with internal operational reporting 

> In FA accountants are required to make reports/ prepare financial data according to International Accounting Standards applicable in a territory

> In MA, reports/ financial information vary nature of the business of company to company

> FA is solely concerned with the determination of:

=> financial performance of a business,

=> financial position of a business,

=> cash flows etc.

> While MA is concerned with inventory management, purchasing of inventory, order size, frequency of orders, inventory levels etc.

> International Financial Reporting Standards (IFRSs) are being followed while preparing financial information in Financial Accounting

> No standards are being followed in Management Accounting, reporting varies company to company depending upon the nature of its business.