Question

How do accountants and financial managers differ in their use of financial information? Why is cash flow more significant to a financial manager than it is to an accountant?

Answer 1

1.Accountants are more concerned about book entries of different financial transactions and they are more concerned about need to present them at the right place.

while financial managers are more concerned about making a strategic decision based upon the financial statements. Financial managers tasks are more of analytical in nature.

accountant task related to financial statement are Clerical in nature while financial managers task related to financial statements are decision making and analytical in nature.

2.Cash flows are more significant for a financial manager as it helps him to manage with the financial statements and take decisions accordingly in relation with the future projects which may be undertaken by him.

cash flows to an accountant are majorly related with recording them into the right account and adequate cash flow statement headings.

Managers are more concerned about various kinds of decision making related to capital budgeting and project undertaking as well as investment and abandonment of different projects related to Cash flows while accountant task is just related to recording and Clerical in nature as they are not analytical .