Financial accountancy (or financial accounting)
is the field of accountancy concerned with the preparation of financial statements
for decision makers, such as stockholders, suppliers, banks, employees, government
agencies, owners and other stakeholders. Financial capital maintenance can be measured
in either nominal monetary units or units of constant purchasing power. The central need for
financial accounting is to reduce the various principal-agent problems, by measuring
and monitoring the agents' performance
and thereafter reporting the results to
interested users. Financial accountancy is used to prepare
accountancy data for people outside the organisation or for those, who are not involved
in the mundane administration of the company. Management accounting, provides
accounting information to help managers make decisions to manage and enhance the
business. In short, financial accounting is the process
of summarising financial data, which is taken from an organisation's accounting records
and publishing it in the form of annual or quarterly reports, for the benefit of people
outside the organisation. Financial accountancy is governed not only by
local standards but also by international accounting standard. Read more here:
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