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Question Four: (6 marks) (AI, DI) Part A: (3 marks) Financial and managerial accounting are both concerned with the economic events of an enterprise. Similarities between financial and managerial accounting do exist, but they do have a different focus. Briefly distinguish between financial and managerial accounting as they relate to (1) the primary users, (2) the type and frequency of reports, (3) the purpose of reports, and (4) the content of reports. 1) The Financial accounting primary users are stockholders, creditors, and regulators. In contrast, managerial accounting primary users are internal users such as officers and managers. 2) Financial statements are what results of financial accounting. The statements are prepared quarterly and annually. In managerial accounting, internal reports may be prepared as frequently as needed. 3) The purpose of financial accounting is to provide general-purpose information for all users like external auditors for example. The purpose of managerial accounting is to provide special-purpose information for specific decisions 4) Differences in the content of the reports are as follows: Financial Managerial Pertains to business as a whole and is highly Pertains to subunits of the business and aggregated; may be very detailed. Limited to double-entry accounting and cost. Extends beyond double-entry accounting data system to any relevant data. . Generally accepted accounting principles Standard is relevance to decisions. In financial accounting, financial statements are verified annually through an independent audit by certified public accountants. There are no independent audits of internal reports issued by managerial accountants

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