Financial reporting involves the disclosure of financial information to management and the public (if the company is publicly traded) about how the company is performing over a specific period of time. Financial reports are usually issued on a quarterly and annual basis. This is different from management reporting, which is financial information that’s disclosed to those inside the company to be used to make decisions within the company. Financial reports are included in a public company’s annual report.
Managerial accounting is more concerned with operational reports, which are only distributed within a company. Financial accounting must comply with various accounting standards, whereas managerial accounting doesn’t have to comply with any standards when information is compiled for internal consumption.
With Financial reports there’s a focus on the financial statements which are distributed to stockholders, lenders, financial analysts, and others outside of the company. The managerial report has its focus on providing information within the company so that its management can operate the company more effectively.
Such as providing the income statement, a listing of all revenues generated and expenses incurred by a business or department. This report is one of the most important managerial reports available to managers, as it simply shows the profit or loss generated by the firm’s operations.
With financial reporting it’s usually information used for decision making by external users, such as investors and creditors. While the Management report information is used for decision making by internal users, such as the management or operational managers.