Chapter 1.6 FM compared to FA & MA

Question 1

FA

Answer 1

• Details the perf over defined period
• Legally required
• Format is set by law and accounting standard
• Monetary nature (most)
• Historic picture of past performance

Question 2

How FM differs from FA?

Answer 2

• Forward looking
• Useful at providing information that is directly used for decision making
• no set format

Question 3

MA

Answer 3

• Aid management to control activities
• Help in decision making
• No legal requirement
• Format entirely at management discretion
• Both historical records and future planning tool

Question 4

How FM differs from MA?

Answer 4

• Externally focused
• Concerned with long-term decision making