NOBLE, J.

1. Managerial Accounting: An Introduction by ProfAlldredge

‣ https://www.youtube.com/watch?v=GBtqCnvqKm4

Both managerial and financial accounting are under the wide range of accounting, but the
two topics are far more different from each other compared to their similarities. Some people
may think that these two topics are somehow the same since they are both about accounting, they
aren’t since financial accounting focuses more on providing the external users with various
information about the business or company. Since financial accounting is more concerned on the
external users, on the other hand, managerial accounting focuses and discusses more about the
internal users such as the business owners, directors, and its managers. With these information,
managerial accounting then uses important documents of the company such as financial
statements and other financial data to be able to support the company or the whole
management’s action of decision making. However, it does have some limitations. It was said in
the video that it does not have any standards and guidelines that is needed to be followed when it
comes to analyzing various data to support the decision making process of the company. Unlike
financial accounting, managerial accounting does not follow any GAAP or Generally Accepted
Accounting Principles. Basically, managerial accounting focuses on the internal users, it utilizes
the company’s financial statements, there is no standard guidelines and reposts, ang lastly, it
heavily supports and influences the management or company’s power in making decision
process. To understand the similarities and differences of financial and managerial accounting, a
simple venn diagram is presented below.

FINANCIAL ACCT. MANAGERIAL ACCT.

 Both deal with  Focus: Internal

 Focus: External economic and
 Prepares financial business events
statements
 Both try to quantify
 Have/follows GAAP
the results of
business activity and
transactions
 Uses the financial
statements
 There are no standard
guidelines or reports
 It supports the
management in making
decisions
 According to the video lecture, one of the most important functions of managerial
accounting is to support the management in making decisions and to its responsibilities. With
this, the managers’ responsibilities include planning, directing, and controlling the company’s
operations.

One of the responsibilities of a manager is planning where it greatly involves setting

goals and objectives as well as how to achieve them. With this, managerial accounting supports
in this function through the way of budgeting and forecasting primarily.

Another notable responsibility of a manager is directing where it is the ability of

overseeing and inspecting the everyday operations of the company and it also monitors their
overall performance. It was revealed that this is commonly done through an old school approach
which is called MBWA, that stands for "Management by Wandering Around." This kind of
approach is can be called both effective and annoying as well as it tends to lead to
micromanaging of employees. Managerial accounting can then support this function through
dealing or doing scheduling and other reporting.

The last example of a managers’ responsibility is controlling. Controlling is considered to

be an important part of management's responsibility and one of those concepts that is aided by
managerial accounting. It was described in the video that it is the process of comparing the actual
results that happened with planned and well-thought of results. With this, the difference between
the two concepts are known as variances. Also, it enables to make adjustments as much as what
is needed. This concept also greatly involves with such examples of monthly financial reviews,
status reports, and the like and we can say that managerial accounting is greatly involved in here.
 Managerial accounting with the help of the mentioned various functions and concepts in
the earlier paragraphs shows that this type of accounting really helps the management in creating
their decisions for the overall sake of the company. With this, we can say that management is a
continuous process of decision making and this can be considered as a never-ending one as it
will continue no matter what happens. Having this kind of situation, the role and responsibilities
of management accounts all over the world is slowly changing just how the world and its vast
economies are expanding and changing too. According to the video, a changing global economy
requires a lot of businesses to be more flexible and be able to adapt at quicker rates than in the
action in the past. If there are no improvements to the technologies that we have today, then it
will be extremely difficult for management accountants to support and be able to keep up with
the trend. We can say that technological advancement does not only benefits other sectors or
industries but also for the management accounting industry even though it may not be so evident.
Having various and amazing technological advancements in this time, the skills of management
accounts are also changing, expanding, and advancing. To be able to keep up, one must be able
to cope immediately with these technological advancements and they must have a strong
knowledge in both financial and management accounting to be able to produce a more accurate
and transparent output.

Overall, the management accountants that we have today have crucial insights that aids a
company's management team in making key decisions. They also tend to assist various
businesses in making decisions by including a strong financial and statistical evidence, which is
assisted by a well and advanced accounting software. Management accounting can be useful in
determining what should be kept in-house and what should be outsourced. It's crucial to strike
the right balance between the two and using data to direct decisions is a perfect way to make
these tough decisions easier.
Reference:
Accounting Instruction, Help, & How To. (2017). Managerial Accounting
Definition - What is Managerial Accounting. [YouTube channel]. YouTube. Retrieved
from https://www.youtube.com/watch?v=s_q_
rodRGsM&t=23s
Accounting Stuff. (2019). FINANCIAL vs MANAGERIAL Accounting. [YouTube
channel]. YouTube. Retrieved from https://www.youtube.com/watch?v
=qISkyoiGHcI
ProfAlldredge. (2015). Managerial Accounting: An Introduction. [YouTube
channel]. YouTube. Retrieved from https://www.youtube.com/
watch?v=GBtqCnvqKm4