Financial reporting records, tracks, analyzes and reports business income. b This assist
owners, investors and stakeholders make informed and supported decisions on the
management of the business. b Financial reports examine financial and non-financial sources
to assess the financial strength and health of the business. b Managerial reports track the
business activities and keep investors and stakeholders informed. b These are internal reports
that managers and executives utilize to monitor goals, progress and assist in making business
decisions. b Managerial reports are also utilized to run a business. There is a difference
between the two reports. b Financial reporting gives the overall financial strength of the
business and is for internal and external usage. b Managerial reports are to measure growth
and activity within the business and is for internal use only.
Some individuals argue that accountants should focus on producing financial statements and
leave the design and production of managerial reports to information systems specialists. If
accountants only focused on financial statements, both the business and accountant would not be
functioning at its highest. b There are no advantages if accountants only focused on financial
information. b The possibility of having two systems would cost the business and there would be a
possibility of information being lost or altered in translation or when trying to combine the
information from the two systems. Which could devalue the financial or non-financial information
being shared internally or externally. A disadvantage if accountants only focused on financial
information would be that non-financial information such as quality control, market trends or
customer satisfaction could be ignored or not addressed, which could affect a business’ financial
strength positively or negatively. It would be important that management be informed of how
market trends or customer service affect business activity and cash flow to better make decisions.
Information specialist do not have the same training and expertise as an accountant. b
Accountants analyze, prepare, reconcile and provide explanation for financial increase or
decrease.
Accountants hold a very important position in a business when it comes to the bottom line. b
Accountants should be actively involved in the production, analyzing and data gathering for
managerial reports. b It would be advantageous for a business to have an accounting
information system that is integrated with different aspect and business activities, so the
company can have a report that shares all information needed to make better business
decisions. b Accountants should take part in preparing managerial reports to better prepare
management and executives with financial and non-financial data. This would allow the
accountants input on how the information should be processed, organized, analyzed for a
better understanding and end report. b It would also allow the accountant the ability to explain
and answer any questions regarding the managerial or financial reports.
Romney, M. B., Steinbart, P. J., Summers, S. L., & Wood, D. A. (2020). Accounting
Information Systems (15th ed.). Pearson Education (US)
