A Comparision of Financial and Management Accounting.

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Accounting is known to be the procedure that delivers informed decisions and judgements through identifying, analysing and presenting financial information (Weetman, 2003). Similarly, it provides competent information to users to aid decision making at a minimal possible cost (Dury, 2007). According to accounting information and decision making (2012) Michel dell the founder and CEO of Dell incorporated illustrated a success story by the application of accounting techniques. Accounting can be utilised by many entities including employees, who need information to assess the ability of a firm to provide remuneration, shareholders, Managers. Also, government agencies as the HM Revenue & Customs need information to establish taxation on profit incurred (Weetman, 2003). As a result, a wide variety of entities require the application of accounting to facilitate with their decision making. However, accounting information normally differs depending on the specification of users as it can be management or financial accounting (Dury, 2003). Management accounting is closely involved with providing information within an organisation, whereas financial accounting is concerned with providing information to external users of entity (Weetman, 2003). This essay will discuss the variation between these two branches of accounting and describe how they guide to good decision making.

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To begin with, financial accounting issue annual and semi-annual reports which provide finite help to firms especially in evaluating its financial risk exposure (Woods, 2004). Furthermore, it must be prepared to confirm with legal requirements and generally accepted accounting principles as FASB and ASB (Dury,2007). According to Carty (1982), accounting standards are not aimed to be rigid but to narrow areas of difference in accounting practice. Also,  Akgun (2012) stated that there is demand for qualified accountants with full awareness with international financial reporting standards. Furthermore, financial accounting focuses on the whole of a business and the report of ...

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