Following are the basic difference between management accounting and financial accounting.
|Basis of difference||Cost & Management Accounting||Financial Accounting|
|Users||Internal users||External Users|
|Restriction on inputs and processes||It is not subject to the Restriction on inputs requirements of generally accepted accounting principles.||The inputs and processes of financial accounting are well defined and in fact, restricted.|
|Types of information||In cost & management accounting information may be financial or non-financial and may be much more subjective in nature||The restriction imposed by financial accounting tend to produce objective and verifiable financial information.|
|Timing||Although cost & management accounting also records and reports events that have already occurred, there is also a very strong emphasis on providing information about future events||Financial accounting has a historical orientation. It records and reports events that have already happened.|
|Performance||Cost & management accounting provides measures and internal reports used to evaluate the performance of entities, product lines, departments and managers. Essentially very detailed information is needed and provided.||Financial accounting focuses on overall firm performance, providing a more aggregated viewpoint.|
|Breadth||Cost & management accounting is much broader than financial accounting. It includes aspects of managerial economics, industrial engineering and management science, as well as numerous other areas.||Financial account is less broader as compared to management accounting.|