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Manuel, Pauline Keith P.

Accounting 402a Homework


BSAccountancy – 4 10:00-12:00 MWF D605 August 8, 2018

DIFFERENCE BETWEEN FINANCIAL ACCOUNTING AND MANAGEMENT ACCOUNTING

Financial Management
As to
Accounting Accounting
Objective Used to determine the company’s To provide information needed by
operating results for a given period and management in making decisions.
financial condition at a given period.
Application Prepared to show forth the accuracy and Helps management to take meaningful
fair picture of financial affairs. steps and strategize.
Measuring Grid Quantitative (keeps track of all the Both quantitative and qualitative (both
financial information of the entity). the financial and nonfinancial information
of an entity).
Dependence Not dependent on management Takes help from financial accounting to
accounting. make right decisions.
Basis of Decision Data are historical in nature and based Data may be both historical and
Making on objective facts. estimates. However, more emphasis is
given to future estimates.
Statutory Legally mandatory to prepare financial Has no statutory requirement.
Requirement accounts of all companies.
Format Has a specific format for presenting and There’s no set format for presenting
recording information. information.
Used for Mainly for potential investors and all Only for management.
stakeholders.
Rules Should be prepared as per the GAAP or Does not follow any rule.
IFRS.
Proven information Requires that records be kept with Frequently deals with estimates, rather
considerable precision, which is needed than proven and verifiable facts.
to prove that the financial statements
are correct.
Reporting focus Oriented toward the creation of More concerned with operational reports,
financial statements, which are which are only distributed within a
distributed both within and outside of a company.
company.
Efficiency Reports on the profitability (and Reports on specifically what is causing
therefore the efficiency) of a business. problems and how to fix them.
Valuation Addresses the proper valuation of Not concerned with the value of these
assets and liabilities, and so is involved items, only their productivity.
with impairments, revaluations, and so
forth.
Timeliness of Reports are not easily prepared; and Reports are promptly prepared and
reports submission requires time. submitted to preserve its usefulness.
DIFFERENCE BETWEEN CONTROLLERSHIP AND TREASURERSHIP

As to Controllers Treasurers
Focus Concentrate on what has already Focus outward and interact with the
happened inside a company. They prepare bankers, shareholders and potential
financial statements and other reports investors who provide capital.
based on past activity.
Duties They report directly to the Chief In charge of the finance or treasury
Financial Officer, if the company has departments and helping a company grow
one. They often develop and implement its funds and invest those funds. They do
accounting policies for companies and this by issuing stock through public initial
are in charge of the audit, accounting offerings, issuing debt securities -- like
and budget departments. One of their bonds, or negotiating loans from lenders.
main jobs is to put together financial They may also be called vice presidents or
reports. These reports assess the officers of finance. They seek out sound
current state of a company's finances investments to grow the capital they
and make predictions about the financial raise. They are usually the people who
future. They give presentations to chief make sure acquisitions and mergers go
executives about finances and forecasts, smoothly.
and advise executives on accounting
matters. Other financial reports that
controllers are in charge of assess the
company's compliance with laws and
regulations. Controllers are often the
people who submit compliance reports to
the Securities and Exchange Commission
or other regulatory bodies.
Roles Planning for Control Provision of Capital
Reporting and Interpreting Investor Relations
Evaluating and Consulting Short-Term Financing
Tax Administration Banking and Custody
Government Reporting Credits and Collections
Protection of Assets Investments
Economic Appraisal Insurance

*Others Financial reporting and compliance They need experience in jobs that deal
experience is important for controllers, with investing corporate funds, corporate
particularly as it relates to GAAP and debt financing and cash management.
SEC. They often build these skills in Because they deal with securities, they
lower-level roles in the accounting, audit may also need experience in financial
and budget departments. reporting and compliance.

Sources:
https://www.wallstreetmojo.com/financial-accounting-vs-management-accounting/
https://www.accountingtools.com/articles/what-is-the-difference-between-financial-and-managerial-acco.html
http://maaw.info/ControllershipTreasurership.htm
https://woman.thenest.com/contrast-roles-treasurers-controllers-22542.html