Financial and Accounting Paper

Financial and accounting paper

Introduction

This paper covers a number of topics related to financial accounting, managerial finance, and managerial accounting. The paper first discusses the key differences between accounting and finance. This is followed by an analysis of the types of reports accounting and finance personnel generate and the purposes of the reports. The paper then compares and contrasts the types of business decisions that can be made using accounting and finance information, before presenting a conclusion. The work is based on three main articles, by Lagace (2012), Desai (2007), and Anderson et al (2005), but also draws on other elements of the literature and theory.

Key differences between accounting and finance

The key difference between accounting and finance is that accounting focuses on analysing past figures and performance in order to assess a business, whilst finance focuses on future decisions and expenditure by the company (Atrill and McLaney, 2010). This can be seen in the work of Desai (2007) who discusses the use of financial accounting to present profit figures to investors and authorities, and also the work of Lagace (2012), who discusses how corporations face increasing demands to disclose additional information in their annual reports and associated financial accounts. Anderson et al (2005) take a different approach, and discuss this difference between accounting and finance as reflecting an area in which accounting is lacking, arguing that financial statements should be updated to include additional finance information, which will allow individuals to understand more information about a business from viewing a single report, rather than needing to consider accounting information and finance information separately.

The key difference between accounting and finance also means that the two disciplines use different techniques. Accounting generally relies on the accurate recording of past data on an entity's performance,...