Changes in Accounting Due to Globalization Assignment

Changes in Accounting Due to Globalization - Assignment Example Financial accounting refers to information that describes the financial resources, obligations, and activities of the business organization. Management accounting involves the development and interpretation of accounting information designed to assist management (Wiliam and Haka, 2005, p. 5-6). These two accounting systems differ in the dimensions of users to whom the information is produced, the structure of the information, sources of principles for both, report entity, purpose, need and time orientation etc. Financial accounting is basically concerned with producing financial information and reports like financial statements for external users including investors, creditors, government agencies, customers, and banks etc. But, managerial accounting is concerned with producing and providing accounting information for all internal users including managers for decision making, planning and controlling (Heitger and Mowen, 2007, p. 6) Khan (2007) emphasizes that the users of information produced by financial accounting other than management are often a faceless group. Normally, the managers of many companies do not personally know the shareholders or creditors etc. But, users of management account are within the organization like managers and those who help managers produce this information (p. 7) The information is presented in a different structure in management accounting and financial accounting. Financial account must follow a single and unified structure as the information related or presented in different organizations must be more or less in a uniform structure. Balance sheet, profit, and loss account or income statement and cash flow statements are the end products of financial accounting. The balance sheet is a financial position statement of the business for a particular period of time, generally for a financial year.