Financial and managerial accountings

Financial and managerial accountings

Financial and managerial accountings are among the four branches of accounting disciple. Despite the two inheriting some universal accounting principles, they differ a lot in audiences targeted, compliance and the accounting standards they follow (Graybeal, Franklin & Cooper, 2018). Financial accounting showcases the actual business transactions and affairs of a particular company. Management uses financial accounting records to analyses and evaluates a company’s expenditures and income for s specific period of time. On the other hand, management accounting offers vital information for a company that helps in strategic planning and resource allocations. In most cases, managerial accounting is for internal use only while financial accounting can be used by interested parties to evaluate the financial status of the company (Graybeal, Franklin & Cooper, 2018).

In addition, information

retrieved from financial accounting records is more transparent and reveals

less on the company’s operations. It only focuses on financial issues and

quantitative data. On the contrary, managerial accounting reports are exclusively

detailed, specifically and experimental, and used both quantitative and

qualitative data (Graybeal, Franklin & Cooper, 2018). Though financial accounting is independent

of managerial accounting, data and information used in formulating managerial

accounting records are gathered from financial accounting.

Regulations/Rules Followed

Though both financial

and managerial accounting is governed by legal regulations; companies have the

right to only generate managerial accounting reports for internal use.

Companies have the legal right to formulate and create their systems, format,

and rules for managerial accounting (Graybeal, Franklin & Cooper, 2018). Though it is different from financial accounting.

Financial accounting is usually released for public consumption; thus, rules,

formats, and standards are set on how calculations and figures are recorded and

interpreted. In the United States, the financial accounting standards board has

clear set rules and standards of accounting that must be followed in reporting

financial accounting (Graybeal, Franklin & Cooper, 2018).