Cambrige AS and A Level Accounting Notes (9706)/ ZIMSEC Advanced Accounting Level Notes: Differences between Financial Accounting and Cost and Management Accounting
- We have already looked at the basics and definition of both:
- Financial Accounting as well as
- Cost and Management Accounting in the post here
- Here we will looked at a summarised version between the two:
| Difference | Management Accounting | Financial Accounting |
|---|---|---|
| Information is mainly produced for | Internal use for example by managers in decision making | External use by various stakeholders e.g. shareholders and government |
| Purpose of information | To aid decision making and managerial functions such as coordinating, planning etc | To record the financial performance of the entity in a given period and show its financial position |
| Legal requirements | None material is prepared according to the needs of the entity | Reports must be produced at least once a year in most cases depending on applicable laws |
| Format to be followed | Decided by managers according to their needs | Format and content is set by reporting standards such as IASes or IFRSs |
| Nature of information | Both financial and non-financial information is in reports | Usually mostly just financial information except notes to financial statements |
| Time period | Both historical and forward looking in nature | Usually just historical e.g performance in past period(s) |
- Remember that management accounting includes cost accounting (costing)
To access more topics go the ZIMSEC Advanced Level Accounting page
To access more topics go to the Cambridge AS/A level page
