Compare financial accounting and management accounting

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Question - Compare financial accounting and management accounting?

Answer -

Financial Accounting reports are used by outside parties such as creditors, shareholders, tax authorities etc. whereas Management Accounting reports are used by managers inside the organization for planning, directing, controlling and taking decisions.
In Financial Accounting, only historical financial transactions are considered and do not consider non financial transactions whereas in Managerial Accounting emphasis is on decisions affecting the future, thus it may consider future data as well s non financial factors.
Maintenance of financial accounting records and preparation of financial statements is a legal requirement whereas Management Accounting is not at all legal requirement. Moreover, these systems have their own reporting formats.
In Financial Accounting, precision of information is required whereas in Management Accounting timeliness of information is required.
In Financial Accounting, only summarized data is prepared for the entire organization whereas in Management Accounting detailed reports are prepared about products, departments, employees and customer.
Preparation of Financial Accounting is based of Generally Accepted Accounting Principles whereas Management Accounting does not follow such principles to prepare reports.
Financial reports generated by the Financial Accounting are required to be accurate whereas accuracy is not the prerequisite of management accounting.

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Managerial Accounting Interview Questions and Answers