Discuss the role of the financial accounting and managerial accounting functions in organizations and some of their job responsibilities. What are some of the differences between the two and the type of reports they may each use?© BrainMass Inc. brainmass.com March 4, 2021, 7:08 pm ad1c9bdddf
Here are your answers:
Financial accountancy (or financial accounting) is the branch of accountancy concerned with the preparation of financial statements for external decision makers, such as stockholders, suppliers, banks and government agencies. The fundamental need for financial accounting is to reduce principal-agent problem by measuring and monitoring agents' performance.
Management accounting is concerned with the provisions and use of accounting information to managers within organizations, to assist management making decisions and managerial control functions. Unlike financial accountancy information (which, for the most part, is public information), management accounting information is used within an organization and is usually confidential. Contemporary managerial accounting systems are focusing more on the activities that occur at all levels of the organization.
According to CIMA, The Chartered Institute of Management Accountants, Management Accounting defines as "The process of identification, measurement, accumulation, analysis, preparation, interpretation and communication ...