Management vs. Financial Accounting
Management accounting is the field of accounting that serves internal decision-makers, such as top executives, college deans, hospital administrators and people at other management levels within an organisation. It involves the identification, measurement, accumulation, analysis, preparation, interpretation and communication of financial information used by management to plan, evaluate, control and assure the appropriate use of its resources.
Financial accounting, on the other hand, is a field that addresses the needs of decision-makers external to the organisation. These decision-makers can include credit and equity investors, suppliers, lenders, government agencies and regulatory bodies, special interest groups, labour unions, consumer groups, and the general public. The financial accounting process culminates in the preparation of financial reports, such as daily balance sheets and quarterly or yearly income statements that help to answer questions such as: "What is the financial position of the firm on a given day?" and "How well did the firm do during a given period?"
Within these main areas of accounting exists a variety of custom-tailored sub-types that address specific needs such as auditing, taxation and consulting, which can further be sub-divided by industries such as property, banking and more.