Introduction to Management Accounting

There are three branches in accounting:
You have already been introduced to two of them viz financial accounting and cost accounting, In their own way, as accounting has developed, it has led to increased aspirations of accounting professionals that have not been met by the two branches thus giving rise to the third branch called management accounting.

Let us understand first how MA is different from FA
                                                     

Comparison Chart

BASIS FOR COMPARISONFINANCIAL ACCOUNTINGMANAGEMENT ACCOUNTING
MeaningFinancial Accounting is an accounting system that focuses on the preparation of financial statement of an organization to provide the financial information to the interested parties.The accounting system which provides relevant information to the managers to make policies, plans and strategies for running the business effectively is known as Management Accounting.
Is is compulsory?YesNo
InformationMonetary information only.Monetary and non-monetary information
ObjectiveTo provide financial information to outsiders.To assist the management in planning and decision making process by providing detailed information on various matters.
FormatSpecifiedNot specified
Time FrameFinancial Statements are prepared at the end of the accounting period which is usually one year.The reports are prepared as per the need and requirements of the organization.
UserInternal and external partiesOnly internal management.
ReportsSummarized Reports about the financial position of the organizationComplete and Detailed reports regarding various information.
Publishing and auditingRequired to be published and audited by statutory auditorsNeither published nor audited by statutory auditors.

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