Managerial vs. Financial Accounting
Managerial
Focused on the future
Financial
Focused on the past
Financial
Governed by Generally Accepted Accounting Principles (GAAP) or International Financial Standards Board (IFRS)
Financial
Information is verified by external auditors
Managerial
Main characteristic of data is that it must be relevant
Financial
Main characteristic of data is that it must be reliable and objective
Managerial
Not governed by legal requirements
Financial
Primary users are external (i.e., creditors, investors)
Managerial
Primary users are internal (i.e., company managers)
Financial
Reporting is based mainly on the company as a whole
Managerial
Reports are prepared as needed
Financial
Reports are usually prepared quarterly and annually
Managerial
Reports tend to be prepared for the parts of the organization rather than the whole organization
