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Chapter 1




                           Financial accounting and management

                           accounting



               8.1   Key differences

               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 accounts,
                     statements for external users.                  used by management to control
                                                                     the business and plan for the
                    Usually prepared annually.                      future.


                    Generally required by law.                     Normally prepared monthly, often
                                                                     on a rolling basis.
                    Reflects past performance and
                     current position.                              Not mandatory.

                    Information calculated and                     Includes budgets and forecasts of
                     presented in accordance with                    future activities, as well as
                     international accounting                        reflecting past performance.
                     standards.
                                                                    Information computed and
                                                                     presented in order to be relevant
                                                                     to managers.
































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