Current Issues in Management and Financial Accounting Essay

Current Issues in Management and Financial Accounting - Essay Example The aim is to show the current issues that are making the two fields different; the current issues related with these fields. According to Lawrence J. Gitman differences between the two, harmonized financial accounting and variables management accounting are shown in this assignment to understand their purpose to deal with the accounting system. Below different factors are given used to develop a clear information to the reader that how the role of these two branches differ. Garrison Noreen mentioned that two approaches accounting differ with each other in respect to financial statements. The financial accounting actually deals with the presentation of financial data where as the management accounting is the management of the accounting and cost within the firm structure. The financial accounting system actually used to make different financial reporting and therefore, the financial accounting standard board has launched different standards that must be taken in consideration while forming the financial statements. That is the reason that the financial accounting system becomes a harmonized system whereas, management accounting do effect on the financial statements but this actually deals with the management of cost structure within the firm. ... ifference between the two approaches is that management accounting uses different forms of cost structure to ensure minimum cost used in the firm where as financial accounting actually deals with structures and reporting that inform that how much cost is incurred by the firm. The management of any firm uses the management accounting to control their cost within different firms where as financial accounting actually seeks the usefulness of such management accounting system. The management of the firm consider mainly on their cost structure so that they can manage their cost structure to gain much benefits in their financial statements. The financial accounting on the other hand has very precise purpose, it helps in forming the financial statements and also helps the firm to provide a better future understanding of their newly projects. They help to know that which project will be better while management accounting helps the management to manage their cost to gain extra. Therefore, the management uses the harmonized and standard financial accounting system to elaborate better financial conditions of the firm. Therefore, management The management accounting uses different standardized cost structures within the firm where as the financial accounting do not have any standardized cost structure that can be used by the firm. The system design of any firm includes the cost structure and cost design of the firm. For instance either the firm is using the job-order processing system and or process order system (Carl S. Warren, James M. Reeve, Philip F. (2005)). These systems define the cost structure of the firm. The firm chooses these management accounting systems according to the use of resources so that they can incur less cost in the firm. Where as, the financial