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Introduction to financial reporting

Financial accounting and management

accounting

The key distinctions between financial accounting and management accounting can
be summarised as follows:

Financial accounting Management accounting

Production of summary financial  Production of detailed
statements for external users. accounts, used by

management to control the
 Usually prepared annually. business and plan for the
 Generally required by law. future.

 Reflects past performance  Normally prepared
and position. monthly, often on a rolling
 Information calculated and basis.
presented in accordance  Not mandatory.
with international
 Includes budgets and
accounting standards.
forecasts of future
activities, as well as
reflecting past
performance.

 Information prepared and
presented in order to be
relevant to managers.

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