Differences between Cost Accounting and Management Accounting
The difference between cost accounting and management accounting is very crucial for the users of both the accounting system are the internal management of the organization. So, it is sometimes believed that they are one and the same thing but they are quite different from each other in many areas. If we talk about cost accounting, it has a quantitative approach, but the management accounting gives emphasis on both quantitative and qualitative data. So, let’s start the difference between Cost Accounting and Management Accounting.
Cost accounting
- Meaning: The recording, classifying and summarizing of cost data of an organization is known as cost accounting.
- Information type:
- Objective: Ascertainment of cost of production.
- Primary Role: Determination of cost and cost control are the primary roles of cost accounting.
- Dependency: Success of cost accounting does not depend upon the management accounting system.
- Statutory Audit: a Statutory audit of cost accounting reports are necessary in some cases, especially big business houses.
- Scope: Narrow, as it is limited only up to the cost information.
- Specific procedure:
- Recording: Records past and present data.
Management accounting
- Meaning: The accounting in which both financial and non-financial information is provided to managers is known as management accounting.
- Information type: Quantitative and qualitative.
- Objective: Providing information to managers to set goals and forecast strategies.
- Primary Role: Efficient and effective performance of a concern is the primary role of management accounting.
- Dependency: Success of management accounting depends on sound financial accounting system and cost accounting systems of a concern.
- Statutory Audit: a Statutory audit of cost accounting reports are necessary in some cases, especially big business houses.
- Statutory Audit: No statutory requirement of audit for reports.
- Scope: Its area of operation is wide.
- Specific procedure:
- Recording: It gives more stress on the analysis of future projections.
Both the cost accounting and management accounting are a part of accounting. They are helpful in for ensuring the smooth and efficient running of the business.
