Question 1 Financial Accounting’s objective is to provide the outside parties, such as creditors or investors with information that is useful for them. Financial Accounting is historical, quantitative, monetary and verifiable and it usually reflects activities of the whole organization. Management Accounting, on the other hand, is used to gather information that is either financial or nonfinancial so it could be given to internal users, like a manager of a specific store. Managers are usually concerned about how they will be able to fulfill goals given by their corporate officer and how they can communicate a successful strategy. Management accounting may be forecasted, qualitative or quantitative, (non) monetary, and timely but at a minimum. Question 2 It’s important to have legally binding cost accounting standards for defense contractors because the company managers might manipulate some information in order to save their companies and their jobs. These accounting standards ensure that companies are not hiding any information that might be very
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