Managerial and Financial Accounting Report
Week one paper
July 26, 2006
This report is intended to discuss the differences between financial accounting and managerial accounting. By discussing the differences in the types of reports that are generated by the two different accounting systems, this report will compare and contrast the types of decisions made using the information that the two types of accounting would use in a business setting.
Second this report will outline the Institute of Management Accountants, (IMA), and Standards of Ethical Conduct for Management accountants, in which the author will discuss its four major categories and give workplace examples that would show violations of each category discussed.
Differences between Financial and Managerial accounting.
Before the differences between the two types of accounting can be examine, it should be known exactly what financial and managerial accounting are. By definition financial accounting is: Financial accountancy (or financial accounting) is the branch of accountancy concerned with the preparation of financial statements for external decision makers, such as stockholders, suppliers, banks and government agencies. The fundamental need for financial accounting is to reduce principal-agent problem by measuring and monitoring agent's performance. The definition of managerial accounting: MFAR 3
The branch of accounting that uses both historical and estimated data in providing information that management uses in conducting daily operations in planning future operations, and in developing overall business strategies.
Financial accounting is used to keep records of organization's monetary transactions, tracks its performance through reports that reflect its current financial position, and shows the overall financial health of an organization. Versus Managerial accounting is "oriented more toward...