Role of Financial Accounting Versus Managerial Accounting Matrix Questions Financial Accounting Managerial Accounting What is the primary purpose of the accounting system? To provide investors, creditors, and other external parties with useful information about the financial position, financial performance, and cash flow prospects of an enterprise. To provide managers with information useful for planning, evaluating and rewarding performance, and sharing with other outside parties. To apportion decision-making authority over the resources of the business. What are the types of reports produced? Primarily financial statements (statement of financial position or balance sheet, incomestatement, statement of cash flows) and related notes and supplemental disclosuresthat provide investors, creditors, and otherusers information to support externaldecision-making processes. Many different types of reports, depending on the nature of the business and the specific information needs of management. Examples include budgets, financial projections, benchmark studies, activitybased cost reports, and cost-of-quality assessment. Who are the primary users? Outsiders as well as managers. For financial statements, these outsiders include stockholders, creditors, prospective investors, regulatory authorities, and the general public Management (different reports to different managers), customers, auditors, suppliers, and others involved in an organization’s value chain. What portion of the company is the primary focus? Usually the company viewed as a whole. A component of the company’s value chain, such as a business segment, supplier, customer, product line, department, or product. What time periods are included? Usually a year, quarter, or month. Most reports focus on completed periods. Emphasis is placed on the current (latest) period, with prior periods often shown for comparison. Any period–year, quarter, month, week, day, even a work shift. Some reports are historical in nature; others focus on estimates of results expected in future periods. Are there any requirements for the standards of report presentation? Generally accepted accounting principles, including those formally established in the authoritative accounting literature and standard industry practice. Rules are set within each organization to produce information most relevant to the needs of management. Management needs include reporting to both external constituents and internal users. Source: Weygandt, J.J., Kieso, D.E. y Kimmel, P.D. (2015). Accounting principles. (12th Ed.). John Wiley & Sons. New York. ...

1. Role of Financial Accounting Versus Managerial Accounting
Matrix
Questions
Financial Accounting
Managerial Accounting
What is the primary
purpose of the
accounting
system?
To provide investors, creditors, and other
external parties with useful information
about the financial position, financial
performance, and cash flow prospects
of an enterprise.
To provide managers with information useful
for planning, evaluating and rewarding
performance, and sharing with other outside
parties. To apportion decision-making
authority over the resources of the business.
What are the types

2. of reports
produced?
Primarily financial statements (statement
of financial position or balance sheet,
incomestatement, statement of cash
flows) and related notes and supplemental
disclosuresthat provide investors,
creditors, and otherusers information to
support externaldecision-making
processes.
Many different types of reports, depending
on the nature of the business and the
specific information needs of management.
Examples include budgets, financial
projections, benchmark studies, activitybased
cost reports, and cost-of-quality
assessment.
Who are the
primary users?
Outsiders as well as managers.
For financial statements, these
outsiders include stockholders,
creditors, prospective investors,
regulatory authorities, and the
general public
Management (different
reports to different
managers), customers,
auditors, suppliers, and
others involved in an
organization’s value chain.

3. What portion of the
company is the
primary focus?
Usually the company viewed as a whole.
A component of the company’s value
chain, such as a business segment, supplier,
customer, product line, department, or
product.
What time periods
are included?
Usually a year, quarter, or month. Most
reports focus on completed periods.
Emphasis is placed on the current (latest)
period, with prior periods often shown for
comparison.
Any period–year, quarter, month, week,
day, even a work shift. Some reports
are historical in nature; others focus on
estimates of results expected in future
periods.
Are there any
requirements for
the standards of
report
presentation?
Generally accepted accounting principles,
including those formally established in the

4. authoritative accounting literature and
standard industry practice.
Rules are set within each organization
to produce information most relevant to
the needs of management. Management
needs include reporting to both external
constituents and internal users.
Source: Weygandt, J.J., Kieso, D.E. y Kimmel, P.D. (2015).
Accounting principles. (12th Ed.). John Wiley & Sons. New
York.