"The emphases of financial accounting and management accounting differ." Explain.

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Part 1

A.

The emphasis of financial accounting is reviewing detailed reports including details about products, departments and territories. Management accounting focuses more on summary reports of the entity as a whole.

B.

The emphasis of management accounting has traditionally focused on the accounting constraints of Generally Accepted Accounting Principles (GAAP). The only accounting constraints for financial accounting is requiring the benefits of improved management decisions to exceed information costs.

C.

The emphasis of management accounting is mainly focused on historical evaluation, like current year performance versus the prior year performance. Financial accounting focuses on budgets as well as historical records, like up-to-date current year performance compared to budgeted current year performance.

D.

The emphasis of financial accounting has traditionally been on the historical data presented in the external reports. Management accounting is more future-oriented and emphasizes planning, control, and decision-making.