Professional Documents
Culture Documents
3.
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Lack of continuity and Co-ordination: In order to make the conclusions drawn by management
accountant meaningful, they must be implemented in the organisation at various levels. But in actual
practice they loose their significance because it is not feasible to implement such conclusions.
Lack of objectivity: There are every possibility of personal bias and manipulations from the
collection of data to the interpretation stage in financial accounting. Thus, it looses objectivity and validity.
Costly: The Installment of management accounting system in a concern requires large organisation
and a wide net work of rules and regulations and thus requires a heavy investment.
Evolutionary Stage: The management accounting is in a recent origin and still in an evolutionary
stage. New theories and new techniques are being introduced every now and then. Thus, Essential to keep
a continuous track for the latest theories and their application.
Effect of time element: The information received in management accounting are all past and by
the time the information and statistics are introduced. The situations are all changed and this condition puts
the organisation in difficulties.
Financial Accounting Vs Management Accounting
Financial Accounting
Audience
Management Accounting
Financial
accounting
produces Managerial
accounting
produces
information that is used by external information that is used within an
parties, such as shareholders and organization, by managers and employees.
lenders.
Objectives
Optional?
Segment
reporting
Focus
Format
Rules
Reporting
frequency and
duration
Information
Defined - annually,
quarterly, yearly.
in
Monetary and
information.
company
goal
driven