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Essay / Research Paper Abstract
This 4 page paper looks at the differences between financial accounts and management accounts, considering the different types of users that will refer to them, the divergent purposes and the accounts, their differing characteristics and the types of decision making that they support. The bibliography cites 3 sources.
Page Count:
4 pages (~225 words per page)
File: TS14_TEmanfina.rtf
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Unformatted sample text from the term paper:
of accounts and the type of information they want can vary. The two main forms of accounting are financial accounting and management accounting, they are used by different users groups,
see different types of accounts presented which are prepared in divergent ways. To appreciate the differences we need to look at each of these types of accounts. When looking
at the performance of companies as it reporting in the press releases and in the annual reports, these are financial accounts. The main users of these accounts are external to
the organization, for example, investors. They will want to assess the performance of the company, being able to compare its performance to others in the same industry, or others in
terms of the potential for investment returns. They may also be the desire to compare the performance of the company against its previous years. However, before annual accounts can be
produced a great deal of information needs to be gathered and the results audited. The audit assumes the business is a going concern unless sit is noted others, and as
such although the business is still operating the majority of people using these accounts are not directly involved with the day to day running of the company and as such
can understand that the figures are all historical, and may be out of date by the time they are read. When looking at
financial accounts it is important to remember that the shareholder is deemed to be the defined user. This has implications on the way in which the accounts are prepared
and it may be argued that if this defined user was another stakeholder group there would be a different perspective placed on the annual accounts and the results would be
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