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Feasibility studies
Financial Accounting, on the other hand, concentrates on the production of financial reports,
including the basic reporting requirements of profitability, liquidity, solvency and stability. Reports of
this nature can be accessed by internal and external users such as the shareholders, the banks and
the creditors.
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While financial accountants follow Generally Accepted Accounting Principles set by professional
bodies in each country or International Financial Reporting Standards, managerial accountants
make use of procedures and processes that are not regulated by a standard-setting bodies.
Multinational companies prefer to employ managerial accountants who have a widely recognised
certification such as CGMA, Chartered Global Management Accountant certified by the AICPA and
CIMA, ACMA certified by the Institute of Cost Accountants of India [1], Chartered Management
Accountant certified by the Chartered Institute of Management Accountants, or CMA, Certified
Management Accountant certified by the Institute of Management Accountants.
Time Period[edit]
Managerial Accounting provides top management with reports that are future-oriented, while
Financial Accounting provides reports based on historical information. There is no time span for
producing managerial accounting statements but financial accounting statements are generally
required to be produced for the period of 12 previous months.
Other differences[edit]
There is no legal requirement for an organization to use management accounting, but publicly
traded firms (limited companies or whose shares are bought and sold on an open market) must,
by law, prepare financial account statements.
In management accounting systems, management may be concerned about how reports will
affect employees behavior whereas financial management concerns are about the adequacy of
disclosure in financial statements.