Financial and management accounting are converging

1) The difference between financial and managerial accounting is that financial accounting is the collection of accounting data to create financial statements, while managerial accounting is the internal processing used to account for business transactions.

The certification for each of these types of accounting is different as well. People who have been trained in financial accounting have a Certified Public Accountant designation, while those with a Certified Management Accountant designation are trained in managerial accounting.

The perception that more training is required for financial accounting might be reflected in the higher pay rates of financial accountants over managerial accountants.

But such difference is diminishing over recent year because

1. Both are the parts of total accounting information system.

2. Economic events are dealt in the both system of accounts.

3. The economic events are qualified only in terms of rupees.

4. Both are concerned with financial statements, revenues, expenses, assets, liabilities and cash flows.

5. Both the system of accounts are accumulating and classifying the accounting information for the preparation of financial statements.

6. Some database is used for preparing financial statements and reports under both system of accounts.

7. Both are determining and measurement of costs for different accounting periods and even for different departments and sections.

8. The same accounting principles and concepts a