Question

Discuss the differences between Management Accounting and Financial Accounting.

Answer 1

Differences between Financial Accounting and Management Accounting

Financial Accounting	Management Accounting
Financial Accounting is regulated by law(principles,content), i.e., it is standardized.	Management Accounting is regulated and established by the entrepreneur,it is not standardized.
It focuses on the economic events of the past,the statements contain historical data.	It also uses future data and information,not only historical data,for the purpose of planning.
The statements are regulated by law,this is what is called the reporting obligation.	The entrepreneur has no such obligations, he decides on the company's operations by himself.
It basically focuses on the financial year.	The time horizon is defined by the company itself.
The compilation of financial statements for the financial year is obligatory.	The frequency of compiling financial statements is defined by the company itself.
The financial statements show the company as a whole.	It focuses on smaller units,so it draws attention to the company's organizations and products.
The information in the financial statements is mostly defined in financial values.	Besides value data, it basically provides quantitative data.
The information content of the published financial statements is typically supervised by an auditor.	Information is supervised by internal auditors.