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Financial Reporting and Control

The document outlines the distinctions between management accounting and financial accounting, highlighting that management accounting aids internal decision-making based on current and future trends, while financial accounting presents historical performance to external stakeholders. It also discusses data reporting as a means to assess organizational performance and compliance reports as documentation for regulatory adherence. Overall, the content emphasizes the importance of these accounting practices in guiding business operations and ensuring compliance.

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Nike Abaya
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11 views

Financial Reporting and Control

The document outlines the distinctions between management accounting and financial accounting, highlighting that management accounting aids internal decision-making based on current and future trends, while financial accounting presents historical performance to external stakeholders. It also discusses data reporting as a means to assess organizational performance and compliance reports as documentation for regulatory adherence. Overall, the content emphasizes the importance of these accounting practices in guiding business operations and ensuring compliance.

Uploaded by

Nike Abaya
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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FINANCIAL REPORTING AND

CONTROL

Geoffrey Cabalza
WHAT IS MANAGEMENT
ACCOUNTING?

• Management accounting, also referred to as managerial accounting,


is used by managers and directors to make decisions regarding the
daily operations of a company. A distinguishing feature of managerial
accounting is that it is not based on past performance, but on
current and future trends. For example, determining how much your
business should charge for a new product and analyzing how much
revenue a future product line is capable of generating are both
examples of business problems within the field of managerial
accounting. So, too, is deciding when to replace the computers in
your offices. Since business leaders constantly need to make
operational decisions in a short amount of time, management
accounting must rely on predicting markets and future trends.
WHAT IS FINANCIAL ACCOUNTING?

• Financial accounting is used to present the financial


health of a company to external stakeholders. This allows
the board of directors, stockholders, potential investors,
creditors and financial institutions to see how the
company has performed during a specific period of time
in the past. These reports are filed on an annual basis. If a
business is considered a publicly-traded company on the
stock market, the reports must be made part of the public
record. In a financial accounting course, students learn
how to prepare, read and analyze financial statements.
WHAT IS THE DIFFERENCE BETWEEN
THE TWO?

• There are two primary differences between financial and


management accounting. The first difference is that management
accounting is presented to a company’s internal community, while
financial accounting is prepared for an external audience. Even
though financial accounting is of great importance to current and
potential investors, management accounting is necessary for
managers to make current and future financial decisions for their
business. The second difference is that financial accounting is exact
and must adhere to Generally Accepted Accounting Principles
(GAAP), while management accounting can be based off a guess or
estimate since most managers do not have time to get exact
numbers by the time a decision needs to be made.
WHAT IS DATA REPORTING?

• Data reporting is the process of collecting and formatting


raw data and translating it into a digestible format to
assess the ongoing performance of your organization.
• A company’s data reporting often summarizes financial
information such as revenues, accounts receivables, and
net profits. This provides a timely record of the financial
health of the company, or a segment of your finances,
such as sales.
• Data provides a path that measures progress in every
area of our lives. It informs our professional decisions as
well as our day-to-day matters. A data report will tell us
where to spend the most time and resources, and what
needs more organization or attention.
WHAT ARE COMPLIANCE REPORTS?

• A compliance report is the documented evidence you


must produce to auditors to prove your company is
compliant with the requirements put in place by a
government and regulatory agency under a particular
regulation.
• Compliance reports determine the compliance initiatives
that have been effectively undertaken and the areas
that need to be worked on to ensure full compliance.
Besides being used as proof for submission to auditors,
compliance reports can be utilized to make better
decisions about risk management, allocation of
resources and additional measures with respect to
compliance.

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