Managerial And Financial Accounting Report

Financial Accounting is reporting of the financial position and performance of a firm through financial statements issued to external users on a periodic basis. The financial statements, which are published as a result of the budgeting process are the most widely visible product (and the ones with which the public is most concerned), these financial statements only represent a small part of the budgeting process. Generally speaking, the accounting data and most accounting reports which make up the budgeting process are generated solely or primarily for a company's managers. These management reports may consist of summaries of past events, forecasts of the future, or a combination of the two.

Financial statements and accounting information are so important that bankers and other lenders depend heavily upon it to support their decisions to grant credit. Additionally, the tracking of the practice with financial accounting ratios is important to the understanding of how the practice is performing relative to a chosen standard (Robert Traynor, 2006). Accountants have traditionally concentrated on recording what has happened financially in the past; however, in managerial accounting, accountants are increasingly involved in helping to formulate policy for business organizations, providing information for decision-makers and frameworks for making those decisions. Managerial accountants use financial accounts in the process of decision0making within a business organization. Examples of this process would include determining which business activities were least profitable and then making a decision about whether or not to continue with these business activities, or estimating future revenues in order to aid decision-making today.

The key difference between financial and managerial accounting is that financial accounting is aimed at providing information to parties outside the organization. Whereas managerial accounting information is aimed at helping managers within the organization make decisions. Many people inside and outside a company use the information found in financial statements. Business owners and managers use the data in financial statements to chart the course of their companies, project revenues and expenses, monitor cash flow, keep tabs on costs and plan for the future. Present and prospective employees also want to see their employers' financial performance. Stockholders and investors closely examine financial statements to check a company's performance. They want to compare a business's financial statements with those of other companies to guide their investment choices. Bankers look at a company's most recent financial statements when they make lending decisions. Financial statements also make it easier to for accountants to prepare tax returns and report financial information to the Internal Revenue Service.

Most people outside the management accounting world associate accountants with tax preparation and auditing, not with ensuring that businesses run properly with the correct operational and fiduciary controls. But that perception might change soon given new and increased efforts by IMA, the International Federation of Accountants (IFAC), and others to reinvigorate the profession of management accounting (Stephen Barlas; Alfred M. King; Robert Randall and Kathy Williams, Jan 2006). As per IMA a member's failure to comply with the following standards may result in disciplinary action.

1) Competence: Each member has a responsibility to maintain an appropriate level of professional expertise by continually developing knowledge and skills, Perform professional duties in accordance with relevant laws, regulations, and technical standards.

2) Confidentiality: Each member has a responsibility to keep information confidential except when disclosure is authorized or legally required, inform all relevant parties regarding appropriate use of confidential information, and Refrain from using confidential information for unethical or illegal advantage.

3) Integrity: Each member has a responsibility to mitigate actual conflicts of interest. Regularly communicate with business associates to avoid apparent conflicts of interest. Advise all parties of any potential conflicts.

4) Credibility: Each member has a responsibility to communicate information fairly and objectively, Disclose all relevant information that could reasonably be expected to influence an intended user's understanding of the reports, analyses, or recommendations, and Disclose delays or deficiencies in information, timeliness, processing, or internal controls in conformance with organization policy and/or applicable law.

The ethical considerations of accounting and finance are honesty, integrity, promise keeping, fidelity, fairness, caring, respect for others, responsible citizenship, pursuit of excellence, and accountability. The