Discussion:
Managerial Accounting
Management accounting plays a key role in helping managers carry out their responsibilities. Because the information that it provides is intended for use by people who perform a wide variety of jobs, the format for reporting information is flexible. Reports are tailored to the needs of individual managers, and the purpose of such reports is to supply relevant, accurate, timely information in a format that will aid managers in making decisions. In preparing, analyzing, and communicating such information, accountants work with individuals from all the functional areas of the organization-human resources, operations, marketing, and finance.
Financial Accounting
Financial accounting is responsible for preparing the organization's financial statements-including the income statement, the statement of owner's equity, the balance sheet, and the statement of cash flows-that summarize a company's past performance and evaluate its current financial condition. In preparing financial statements, financial accountants adhere to a uniform set of rules called generally accepted accounting principles (GAAP)-the basic principles for financial reporting issued by an independent agency called the Financial Accounting Standards Board (FASB). Users want to be sure that financial statements have been prepared according to GAAP because they want to be sure that the information reported in them isaccurate. They also know that they can compare the statements issued by one company to those of another company in the same industry.