Discussion response

Reply to Jess discussion post: Both financial and managerial accounting are essential for making informed strategic business decisions. They provide complimentary insights into a companys performance and future direction. Financial accounting is aimed primarily at external users of accounting information, whereas managerial accounting is aimed primarily at internal users. Lets now take a look at each type and this should bring to light on why they are both equally important for making business decisions. Financial accounting focuses on providing standardized financial statements to external stakeholders, including investors, creditors and regulators. This transparency is critical to maintain trust and compliance with legal requirements. Additionally, it offers a historical perspective on a companys financial performance, allowing external stakeholders to assess the profitability, liquidity, and solvency over time. The information used in financial accounting is prepared on a consistent basis such as monthly or quarterly, and the information contained in the accounting reports is subject to audit by a certified public accountant (Kimmel, Weygandt, & Kieso, 2016). Managerial accounting stresses how accounting information can be used internally by managers for planning, controlling and decision-making (Jiambalvo, 2020). It provides detailed financial and non-financial information tailored to the needs of internal management. This includes budgeting, forecasting and performance analysis. This is essential for day-to-day operations and long-term planning. Unlike financial accounting, which is historical, managerial accounting focuses on future projections and operational efficiency. It helps managers make informed decisions on strategic decisions for the company. Lastly, this type of accounting can be customized to meet specific needs of different departments or projects, allowing for timely and relevant information that supports decision making efforts. Together, they enable organizations to navigate complex business environments, optimize performance, and achieve their strategic goals. By integrating both perspectives, businesses can make well-rounded decisions that align with both internal objectives and external expectations. It would be hard for a company to continue being successful without incorporating both types of accounting. References Jiambalvo,J.(2020)Managerial accounting (7th ed.). Wiley. Kimmel, P., Weygandt, J., & Kieso, D. (2016). Accounting tools for business decision making (6th ed.). Wiley