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Chapter 1

1.2 Financial roles

Financial management should be distinguished from other important financial roles:

 management accounting – concerned with providing information for the more
day to day functions of control and decision making

 financial accounting – concerned with providing information about the
historical results of past plans and decisions

The impact of external economic forces (such as interest rates, inflation, exchange
rates) needs to be considered before objectives can be set.

Conflicts will often arise between different stakeholder groups (e.g. shareholders
requiring dividends and employees requiring pay rises).

4