Difference Between Managerial Accounting and Financial Accounting
Basis |
Managerial Accounting |
Financial Accounting |
---|---|---|
Audience and External Reporting | Internal management, decision-makers | External stakeholders (investors, lenders, and so on) |
Time Focus | Future-oriented (planning and decision-making) | Historical (focuses on past financial performance) |
Scope of Reporting | Detailed and segmented (departments, products) | Overall financial performance of the organization |
Regulatory Requirements | Not bound by external standards or regulations | Strict adherence to GAAP, IFRS, and other standards |
Purpose and Decision-Making | Contributes to internal decision-making processes | Assesses financial health and performance and provides information to external stakeholders. |
Users of Information | Internal managers and employees | External parties, such as investors and creditors |