Financial accounting and management accounting play an important part in accounting information system. They co-exist in enterprise production and operation of management, constituting the modern enterprise accounting system together. Much information which management accounting required is from financial accounting, while financial accounting also put the established budget, standards organizations, and such daily accounting data from management accounting as the basic premise.
Financial accounting focuses on external services, but internal services is also included. Information which financial accounting provided on the funding, costs, profits and other information is very important for business management. In particular, financial statements can comprehensive and reflect all aspects of enterprise’s financial position and operating results. Study of the financial statements can grasp the overall situation of the enterprises, managers must first be aware of the overall situation, so that guide enterprises to continuously move forward. Therefore, managers must pay close attention, and be very concerned about the information provided by financial accounting. At the basic of the analysis of financial accounting, the plan could be developed to enhance control and make a scientific decision, how to further improve management and increase economic efficiency could also be studied. So we can not say financial accounting is just the external services, not domestic service, we can only say that the financial accounting focuses on external services.
Management accounting focuses on internal services, but it also contains external services. Investors and creditors concern about the enterprise’s financial position and operating results. In order to improve the enterprise’s financial position and operating results, precondition can only be based on strengthening internal management and improving the work quality and effectiveness at the aspects of production and management. In this regard, management accounting contributes a lot to correct business decision and timely provision of useful information. At the same time, investors and creditors in their decision-making also need to know a number of economic information provided by management accounting, which have important reference value when they make the right judgments and policy decisions.
Management accounting must obtain a variety of information from the different channels for planning and control of production and business activities, such as financial information, statistics, business accounting information and other relevant information. The most basic of which is financial information. For financial accounting has a fixed set of procedures and methods. Information will formed according to some time production and business activities and their results through the registration books, weaving statements, etc., which is not only for external use, but also for internal use. Management accounting can be developed based on financial information, making management accounting information to facilitate the regulation, control and decision making.
Functions of accounting are accounting and supervision. Management accounting and financial accounting have agreed to be subordinated to the general requirements of a modern enterprise accounting, which means the users of accounting information provide relevant information, to achieve enterprise internal objectives and meet the requirements outside the enterprise. So the ultimate goal of financial accounting and management accounting are the same.
Both of financial accounting and management accounting are faced with self-improvement and development. They have to confront the reality of a common problem: how to use modern computer technology to collect, process, store, transmit and report the accounting information; at the same time, they need to handle the demands of modern management properly according to the organization and implementation of accounting management .