Differences Between Management Accounting and Financial Accounting - Other Differences

Other Differences

  • 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 there is no requirement for an independent external review but financial accounting annual statements must be audited by an independent CPA firm.
  • In management accounting systems, management may be concerned about how reports will affect employees behavior whereas management concerns are about the adequacy of disclosure in financial statements.

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