Accounting Information a Senior Executive in a Essay

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Accounting Information

A senior executive in a Fortune 500 firm along with their colleagues on the company's management team are dependent on accurate, timely, and pertinent financial information regarding the health of the organization. Accounting information has aptly been described as "the language of business, which is used in the management, planning, control, and decision- making processes integral to achieving organizational objectives" (Marshall, D. & McManus, W. 1996). In this regard accounting information falls into distinct categories: financial and managerial accounting; yet with considerable overlap in their utilization by management. Explication of these accounting areas provides considerable insight into their utility in providing effective quantitative data for analysis.

Financial and Managerial Accounting

Financial accounting concerns itself with the "preparation and reporting of financial statements for an entity" (Marshall, D. & McManus, W. 1996); while managerial accounting "is concerned with providing information to managers- that is, to those who are inside an organization and who direct and control its operations" (Geense, M.N.D.

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). The bifurcation of financial and managerial accounting is mostly concerned with their respective users; the former "is aimed at providing information to parties outside the organization (Investopedia.com. N.D.), the latter is "aimed at helping managers within the organization" (Investopedia.com. N.D.). Yet this structuring ignores the considerable importance of financial accounting for internal members of the company, specifically the interpretation of the financial statements as to the economic welfare of the organization.

Financial Accounting

Financial accounting's most recognizable information is the financial statements: balance sheet, income statement, statement of cash flows, and statement of change in owner's equity; each providing critical information regarding the financial vitality of the organization. The balance sheet "lists the organization's assets, liabilities, and owner's equity at a specific point in time" (Marshall, D. & McManus,….....

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