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Managerial and Financial Accounting Report
Accounting, like many professions has more than one type of specialty. Discussed in this
paper will be the differences between financial accounting and managerial accounting. The
evaluation will include the types of reports each type of accountant would generate and a
comparison and contrasting of business decisions made by these different types of
accountants. Because ethical considerations are paramount in any business the standards of
ethical conduct for managerial accounts will be reviewed in this paper as well. Included
will be the main categories of the Institute of Management Accountants (IMA) Standards
of Ethical Conduct for Management Accountants in addition to examples of possible
violations for each category.
Accounting is often referred to by many as the language of business. Composing the
measurement, disclosure or provision of assurance about financial information primarily
used by decision makers to make resource allocation decisions within companies,
organizations, and public agencies are some of the functions of accounts. Managerial
accounting is the branch of accounting that deals with confidential financial reports for the
use of top management within an organization. Financial accounting concentrates on the
production of financial reports more widely used by external users of an organization. The
financial accountant will use historical data to generate reports. Future oriented reports are
the focus of the managerial accountant by employing statistical methods with past data to
arrive at future values (Wikipedia, 2007).
Reports generated by a managerial accountant would include a variety of reports to assist
management in making decisions about the future of the company. Sales forecasting is one
of these reports a managerial account may create for an entity. A sales forecasting report
would be created by reviewing the sales history from any period as the basis of forecasting
the quantity of goods to be purchased. Budget analysis, another managerial accountant
report, would analyze the budget and assist in deciding how to distribute efficiently limited
resources within the organization. Comparative analysis reports involve comparing and
contrasting various topics to conclude which is best suited for the company. Another type
of report a managerial account could compile would be a merger and consolidation report
detailing facts and figures for possible mergers or consolidation of an entity. Reports
generated by a managerial accountant are vital in assisting management of an organization
to make business decisions that can affect not only the future of an organization, the
effectiveness of the business, but also if that organization will survive to have a future
