The Role of Financial and Managerial Accounting Functions
Accounting is a major part of an organization or business, it help to provided information needed to manage and make economic decision in order to move the company or organization forward. Financial and managerial accounting work together with emphasis on the future of the company, but have different proposes that helps to enhance the organization both ways as in internal and external.
The main purpose of financial accounting is to provide an external performance of the company or organization accomplishment to their stockholder, lenders, financial analysts, and creditors, tax authorities by prepare financial statement. However, it also reports past and present transactions on the balance sheet and the company’s income and cash flow statement. Managerial accounting is use to focus on providing information within the company or organization, of which includes planning and making decision for the company, it’s a manager’s job, he/she must have proficiency in the managerial accounting because it is the foundation of the company’s future, and the manager’s aim is to control the company’s operation by improving the way internal reports and external financial statement will be used in decision making within the company. In addition, Managerial accounting deal with topics such as cost behavior, profit planning, operational budgeting are all financial decision to be made to produce the external financial statements and its the managers of the managerial accounting department responsibility to have them done.
To compare the two accounting system I would have to say they have similar function, they both produce reports one for external and one for internal that is use for making decision for the company. The managerial accounting deal with confidential financial reports that is used by the CEO’s within the organization or company, these reports are consist of sales forecasting,...