Question

What are the main differences in the role of financial accounting and managerial accounting?

Answer 1

The Roles of both Financial Accounting and managerial accounting is very different such as :-

1. Financial Accounting deals with prepration of financial statements for the interested persons and on the other hand managerial accounting deals with the information of the organisation for the managerial staff for the making of plans and policies for the organisation.

2. Role of financial accounting is very important because it is compulsory for the organisation to prepare financial statements but on the hand managerial accounting is not that important

3. Usually Financial statements are prepared at the end of an accounting period whereas managerial accounting is done as per need of the organisation.

4. Role in financial accounting becomes very important as the financial statements are reported to the authorities as statutory requirements but not any such case in managerial accounting.  

5. As the financial statements are Reported so the internal as well as external becomes its users but on the other side internal managerial staff needs the information.

6. As There is proper format of financial statements prescribed by the organisation for the proper reporting but on the other side there is no such format.

So from the above points we have known that role of financial accounting is much differ from managerial accounting