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Chapter 13

3.5 Financial v Management accounting

Financial accounting Management accounting

Users External Internal

Purpose Record historical financial Assist management in planning
performance and position and controlling the business to
make effective decisions

Law Required by statute (CA 06) No legal requirements

Format/style Must follow accounting Management discretion
standards and company law

Scope Historical, cover business as Flexible, includes historical,
a whole, usually gives current and future information
minimum required information which can focus on specific parts
of the business

Information Mostly financial Financial and nonfinancial Key
Performance Indicators (KPIs)
(e.g. number of customers per
hour)

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