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I fully agree with the answers been added by EXPERTS....THanks
Financial accounting concentrate on financial reporting to any outsiders concernded parties like creditors, bankers, governmental bodies and potential investors. The final object of financial accounting the presentaion of a set of financial statements according to the IFRS or GAAP, which include Statement of financial position, income statement, statement of cash flows , and stateemnt of changes in equity.
On the other hand, amangement accounting is about internal reporting where it provides reports to management about the company's volume/cost/profit analysis, product/service pricing, planning & budgeting.
Financial accounts are prepared for people external to the organization eg shareholders. Management accounts are prepared for internal managers of an organization.
Differences
1. Financial accounts detail the performance of an organization over a defined period and the state of affairs at the end of that period.while management accounts are used to aid management record, plan and control the organization's activities and to help the decision making process.
2.Limited companies must by law prepare financial accounts while there is no legal requirement to prepare management accounts.
3.Most financial accounting information is of a monetary nature while management accounts incorporates non monetary measures.
3. Financial accounts are essentially historical while management are both an historical record and a future planning too.
4. Financial accounts concentrates on the business as a whole while management accounts can focus on specific are of the organization.
Financial accounting has its focus on the financial statements which are distributed to stockholders, lenders, financial analysts, and others outside of the company. Courses in financial accounting cover the generally accepted accounting principles which must be followed when reporting the results of a corporation's past transactions on its balance sheet, income statement, statement of cash flows, and statement of changes in stockholders' equity.Managerial accounting has its focus on providing information within the company so that its management can operate the company more effectively. Managerial accounting and cost accounting also provide instructions on computing the cost of products at a manufacturing enterprise. These costs will then be used in the external financial statements. In addition to cost systems for manufacturers, courses in managerial accounting will include topics such as cost behavior, break-even point, profit planning, operational budgeting, capital budgeting, relevant costs for decision making, activity based costing, and standard costing.
I agree with the answer given by Abu Bakar Ashfaq Senior Audit Associate.
Both Financial Accounting and Management Accounting are not same .
The differences between management accounting and financial accounting include:
Management accounting provides information to people within an organization while financial accounting is mainly for those outside it, such as shareholders
Financial accounting is required by law while management accounting is not. Specific standards and formats may be required for statutory accounts such as in the I.A.S International Accounting Standard within Europe.
Financial accounting covers the entire organization while management accounting may be concerned with particular products or cost centers.
