Differences between managerial accounting and financial accounting
Financial accounting is mandatory since some external parties like tax authorities’ creditors and shareholders’ require such periodic statements, while managerial accounting, is not mandatory. Managerial accounting reports are prepared for use by managers while financial accounting reports are made for external parties. The former must be prepared according to the GAAP standards, while in managerial accounting some provisions are ignored. Though the two procedures use the same data, the relevance is different; financial accounting data are verifiable and objective and used when to solve situations at hand (Tulsian, 2002). On the other hand, managerial accounting data is flexible and ...
