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The Corporate Finance Institute Accounting
Financial Accounting
vs Cost Accounting
While financial accounting is required by law and mainly performed to
benefit external users, managerial accounting is not required by law and
is done to provide useful information to people within an organization,
mainly management, to make better internal business decisions.
A clear comparison can be seen in the following table:
Financial Accounting Managerial Accounting
Purpose of information To communicate the company’s To help management make better
financial position to external users decisions to fulfill the company’s
(i.e. investors, banks, regulators, overall strategic goals
government)
Primary users External users Internal (management)
Focus and emphasis Past-oriented Future-oriented
Annual or quarterly financial Varies from hourly to years of
Time span
reports depending on company information
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