Question

1. It offers 5 examples of business activities or accounting reports that reflect the difference between financial accounting and management accounting in different aspec (purpose, focus, disclosure, etc.) and describes its importance in the performance of the company. (10 points ) Example: Financial Accounting Preparation of a report that includes the quarterly production to report the quarterly results to the parent company. It allows the preparation of quarterly reports for regulatory agencies and shareholders. Management accounting Preparation of a weekly production report by type of product to measure performance. It provides information that helps us estimate in advance whether or not the monthly production goal will be achieved and identify possible problems that impede the achievement of the goal. • Rectangular Snip

Answer 1

	Financial accounting	Management accounting
Scope/Purpose	The main purpose of financial accounting, is maintenance of accounting records , in compliance with the GAAPs , in producing authentic published financial statements for the use of a variety of people like shareholders, the federal government & its various regulatory bodies, investing public ,etc.	The main purpose of management accounting is to generate management information reports , using the financial accounting data,so as to assist the internal management , in its aim of improving the operational efficiency.
Focus	Hence,it follows that its focus is mostly outside parties, other than the management.	Here, the focus of functioning , is to assist the management in ploicy decision-making.
Disclosure	The generally accepted accounting principles , formulated by the respective standards boards , stipulate the disclosures to be made about the different aspects of financial transactions according to which accounting records are maintained, to faciltate such disclosures.	There are no such stipulations & each company maintain reports to suit their requirement , even though there are some general formats, circulated by professional bodies like ICMA and the like.
Reports generated	Statement of income , Balance sheet, Statement of Retained Earnings, Cash flow statement are the four mandatory statements , to be reported for the fiscal year operations , supported by explanatory notes & schedules.The fiscal year is normally one year.	Involves preparation of reports , format & frequency of which are at the sole discretion of the top management of the company.
Audit	The above reports are audited & certified by independent external auditors , who attest to the true & fair presentation of the financial affairs of the company.Both the accounts & Audit reports are made public	There are no such audit requirements , even though the internal auditors test & verify the contents of the reports generated.The reports are exclusively for internal use & hence quite confidential.