| Objective |
To record transactions and present the financial position and performance of the entire business. |
To ascertain and control the cost of products, processes, or services. |
To provide information to management for planning, decision-making, and controlling operations. |
| Primary Users |
External users like investors, creditors, government, and the public. |
Internal users (management) for cost control and product costing. |
Internal users, specifically top-level and middle-level management. |
| Time Focus |
Primarily historical data. It reports on past events. |
Deals with both historical costs and predetermined (estimated) costs. |
Primarily future-oriented, focusing on forecasts, budgets, and planning. |
| Rules & Regulations |
Must adhere to mandatory standards like GAAP or IFRS. |
Not bound by legal standards but follows specific principles and procedures. |
No mandatory rules or formats; driven entirely by management's needs. |
| Reporting Format |
Follows a standardized format (e.g., Income Statement, Balance Sheet). |
Reports are prepared in flexible formats like Cost Sheets and reconciliation statements as needed. |
Reports are highly flexible and customized (e.g., budgets, performance reports, variance analysis). |
| Scope |
Covers the entire organization as a whole. |
Focuses on specific products, departments, jobs, or processes. |
Deals with specific segments or activities and provides a detailed analysis for decision-making. |
| Nature of Information |
Emphasizes precision and primarily uses monetary information. |
Uses both monetary and non-monetary (quantitative) information like units produced or labor hours. |
Uses a wide range of information, both monetary and non-monetary, with an emphasis on relevance and timeliness over precision. |
