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