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Management and Financial Accounting

In: Business and Management

Submitted By luzkate
Words 787
Pages 4
Management Accounting and Financial Accounting Monitoring and controlling the business financial performances is imperative for the success of the business operations and its profitability. Management and financial accounting have tools that can help the company in different ways when trying to reach their goals. Financial accounting is the business tool that provides reports to the stakeholders, creditors, the government, and other individuals outside the organization and is based on past activities and historical results (Atkinson, Kaplan, Matsumura, & Young, 2006). Financial accounting summarizes information that concerns the whole company, reports are prepared on a regular basis, each report most follow specific guidelines in order to be consistent and it focuses on accuracy. Management accounting in the other hand is the business tool that provides financial and nonfinancial information to internal members of the business such as managers and employees. Management accounting helps internal members of the company with profit planning and budgets. It focuses in making current and future decisions in order to better the company. The reports provided by management accounting are prepared when needed and may not be required in a regular basis. Management accounting helps the company’s Chief Executive Officer (CEO) with controlling the company’s performance by measuring outputs produced and their efficiency. It helps by controlling expenses and costs and by organizing resources that can help achieving the company’s goals. Management accounting also analyzes the quality and cycle time of the company’s tasks and chooses the target set of customers (Atkinson, Kaplan, Matsumura, & Young). Management accounting drives the company’s objectives and strategies while measuring profitability and effectiveness. Responsibility centers help with establishing...

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