Q – Hi, please read the discussion below and prepare a Reply to this discussion post with
comments that further and advance the discussion topic.
Please provide the references you used.
Ensure zero plagiarism.
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There are major differences between Managerial and Financial Accounting:
Item
Managerial Accounting
Financial Accounting
Purpose
Offers insights and
evaluations to internal
decision-makers,
supporting their choices.
(Introduction to
Management Accounting,
2005)
Communicates financial
data to outside
stakeholders, including
investors, lenders, and
governing bodies.
(Financial Accounting,
2019)
Audience
Primarily serves internal
members, like
management and senior
executives.
Catered for an external
audience such as
investors, lenders, and
regulatory entities.
Reporting Standards
Lacks stringent
regulations and can adapt
as required.
Follows specific
accounting guidelines like
GAAP or IFRS.
Frequency
Created on an as-needed
basis, potentially daily,
weekly, or monthly.
Usually produced on a
quarterly and yearly basis.
Focus
Looks ahead,
concentrating on future
estimates, budgeting, and
strategic decisions.
Reflects upon past
financial operations,
prioritizing correctness
and full representation.
Detail
Furnishes detailed
insights about specific
divisions, products,
clients, and more.
Offers a comprehensive
overview of the
company’s financial
health.
Scenario Breakdown:
1. The described situation revolves around internal strategic planning, cost evaluation, and
setting future monetary guidelines. Such operations align with the core tenets
of Managerial Accounting.
2. An investor refers to GAAP-compliant quarterly summaries, indicating an external user’s
perspective. This adherence to standardization and a holistic view of the firm is
characteristic of Financial Accounting.
3. Banks and other external bodies demand financial records to gauge a firm’s financial
reliability. They expect standardized, past-oriented, and consistent information. This
aligns with Financial Accounting’s attributes.
4. A financial audit, especially one validating financial statement fidelity concerning tax
filings, is externally oriented. Such an audit ensures clarity, correctness, and adherence to
standardized accounting norms. Thus, the statements involved would be rooted
in Financial Accounting principles.
Reference
Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2019). Financial Accounting. John Wiley &
Sons.
Horngren, C. T., Sundem, G. L., & Stratton, W. O. (2005). Introduction to Management
Accounting. Pearson Prentice Hall.
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