The a future business plan, to evaluate past

The Financial
and management accounting are the two major branches of accounting. Both of
these branches are very important tools for a business decision, however these
two branches will server differently. Business use accounting to identify a future
business plan, to evaluate past performance and check the current business
activity. Financial accounting and management accounting will serve different
audiences.

Management accounting
is concerned about the provision of accurate information to people within the
organization in order to help them improve the decision making and improve the efficiency
and effectiveness of existing operation.

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Besides
that, Financial accounting is concerned with the provision about information relate
to financial health of an organization to external parties outside the organization.
Thus, management accounting could be called internal accounting and financial accounting
will be called external accounting. (Francis, 2014)

The major
differences between these two branches of accounting will be discuss on below.

The first differences
will about the Legal requirements. There
is a statutory requirement for public limited companies to produce annual
financial accounting regardless of whether management believe such information is
useful. However, for the management accounting is entirely optional and
information should be produced only if it is considered that the benefits from the
use of the information by management exceed the cost of collecting it.

Next is
about Time dimension. For financial
accounting is report about what has happened in the past in an organization, while
management accounting will be look to future information and past information. The
decision concerned with future events and management therefore requires details
of expected future cost and revenues.

The next
differences referring about focus on individual
parts or segments of the business.