Question 1: A formal presentation about the importance of the accountant in today’s business organisations.
Differing roles within the accounting profession: Financial and Management Accounting compared.
Accounting is a process of providing economic information to internal and external parties, with regard to an organisation.
Broadly speaking, accounting can be divided into two categories, Financial and Management Accounting.
Financial accountants control the financial management systems of a business. Financial accounting is a requirement in law to “keep proper books of account” (Broadbent and Cullen 1997) The object of these accounts are to provide reports which inform on the finances and assets of a company.
Broadbent and Cullen define the objective of financial accounting as:
“to provide information about the financial position, performance and financial adaptability of an enterprise that is useful to a wide range of users for assessing the stewardship of management and for making economic decisions”
(Broadbent and Cullen 1997)
Financial accounting is mainly concerned with historic or current data, which informs the decision making of external users. It is concerned with the profit and asset management of a company and these reports tend to be general purpose in nature.
Management accounting is concerned with aiding an organisations management in its decision making and is usually specific to the particular need of management rather than the wider needs of other parties. Management accounting tends to utilise historic and future or predicted data, and the users of this information are the management of the organisation, in order to influence their decision making and control. These reports tend to be more detailed and focussed in comparison to financial accounts.
Management accounts can be used to:
* Formulate business strategy
* Plan and... [continues]
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