Management Accounting verses Financial Accounting

System

I wondered if anyone had a difinitive answer to the question "what is the difference between Management Accounting and Financial Acounting?" for me.

Regards
Philippa

System

Re:Management Accounting verses Financial Accounting

Not really a definitive answer but financial accounting tends to be on a historical basis and usually forms the basis of a company/individual's financial statements. Financial accounting therefore accounts for the company's finances.

Management accounting focuses more on the company's operations and how effective they are or could be. Management accounting can be twofold. It can take the form of monthly management accounts (internal accounts for management purposes) or it can take the forum of budgets, KPIs, cash flow forecasts etc. Management accounting is more "in house" whereas financial accounting is geared towards the external users of accounts e.g. Companies House, Banks, Auditors etc.

Kind regards
Steve