Managament accounting

3.1 Financial accounts and management accounts

Financial accounting systems ensure that the assets and liabilities of a business are properly accounted for, and provide information about profits and so on for shareholders and for other interested parties. Financial accounts are prepared for individuals external to an organisation: shareholders, customers, suppliers, tax authorities, employees.

Management accounting systems provide information specifically for the use of managers within an organisation. Management accounts are prepared for internal managers of an organisation.