Differences between Cost Accounting & Management Accounting
Differences between Cost Accounting and Management Accounting
Management accounting and Cost accounting differ from one another. This article lists out 15 such differences as follows.
| Management Accounting | Cost Accounting |
|---|---|
| 1. It assists the management in respect of policy making, planning and controlling the execution of plans. | 1. It assists the management in respect of cost reduction and cost control. |
| 2. It is a recent development. | 2. It is developed before management accounting. |
| 3. It utilizes the information of both financial accounts and cost accounts. | 3. It does not utilize the information of management accounts. |
| 4. It employs ratio accounting, fund flow analysis and cash flow analysis. | 4. It does not employ ratio accounting, fund flow analysis and cash flow analysis. |
| 5. It gives more emphasis for the future. | 5. It gives less emphasis for the future. |
| 6. There is no rigid rules to prepare management accounting records. | The ICWAI has prepared rules relating to preparation and maintenance of cost accounting records. |
| 7. The reports of the management accounting are not subject to statutory audit. | 7. The reports of the cost accounting are subject to statutory audit. |
| 8. Only internal parties are using the reports of the management accounting. | 8. Both internal and external parties are using the reports of the cost accounting. |
| 9. Management accounting has a wider scope. | 9. The scope of cost accounting is not wide. |
| 10. Cost of product or service cannot be fixed with the help of management accounting records. | 10. The cost of product or service can be fixed with the help of cost accounting records. |
| 11. It is evaluating the performance of the management as an institution. | 11. It does not provide for the evaluation of the performance of management. |
| 12. It is concerned with the impact of each element of cost. | 12. It does not consider the impact of each element of cost. |
| 13. It is concerned with both short range and long range planning. | 13. It is more concerned with short range planning. |
| 14. It analyses and interprets the available accounting information. | 14. There is no such analysis and interpretation of available accounting information under cost accounting system. |
| It uses both qualitative and quantitative information. | 15. It uses only quantitative information. |
The following article may also be enlightening: Similarities and differences between management accounting and financial accounting
