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Roles and Responsibilities of Financial and Managerial Accounting Managers

Essay by review  •  April 23, 2011  •  Essay  •  386 Words (2 Pages)  •  1,582 Views

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Roles and Responsibilities

Of

Financial and Managerial Accounting Managers

According to Horngren, Sundem and Stratton in “Introduction to Management Accounting”, “Good management is a result of good information,” (p.3). Collecting and compiling information about a company are the primary responsibilities of both financial and managerial accounting managers. Management accounting produces information for the managers in a company to help fulfill organizational objectives.

“Financial accounting produces reports for external parties such as stockholders, suppliers, banks, and government regulatory agencies,” (p.5) and must adhere to the standards set by the generally accepted accounting practices (GAAP). However, a general purpose accounting system suits both needs.

Managers need the answers to questions that help an organization to achieve their goals. Some examples of these questions would be whether the company is doing well or poorly (scorecard), attention directing questions that focus on comparing actual results to expectations, and problem-solving questions that target specific areas of the organization, and recommend a course of action. (p.5)

Managerial accountants carry titles such as CFO (Chief Financial Officer), controller, and treasurer. The CFO deals with all finance and accounting issues within the organization; the controller and treasurer report to the CFO with matters that aid in decision making. The controller is the organization’s top accounting officer; the treasure is concerned mainly with raising and managing cash. (p. 17-18)

Management accountants primarily serve as advisors to the organization, and generate detailed reports on the organization itself, its products, departments, territories, etc. and include performance and budget reports that focus on organizational goals. Financial accountants summarize the financial state of the company, and report on the entity as a whole. Constrained by generally accepted standards of accounting, these reports are used to comply with federal and state regulations, and are more detailed. By contrast, management accounting can take any form that suits the organization.

There are differences as well

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