Terry Thompson has a dilemma, two of his supervisors are leaving, Jeff superviso

Question

Terry Thompson has a dilemma, two of his supervisors are leaving, Jeff supervisor of the management accounting function and Fred, supervisor of the financial accounting department. Terry’s background is finance and has only a basic understanding of accounting. He comes to you and asks, “I need to either hire someone from the outside or promote internally. What qualifications should I seek in each of the positions and what role do these positions play in strategic planning?

Required:
1. Answer each of the two questions by Terry. Your answer should be in a form of well prepared memo
2. In your own words what is the difference between a financial and managerial accountant?

Explanation / Answer

2. In your own words what is the difference between a financial and managerial accountant?
Financial accounting is for creating financial statements. The 3 most common of which are balance sheet, income statement, cash flow. There are different ones for governments and not-for-profits but are basically same. The financial statements are used by third parties--investors in the case of businesses, citizens/taxpayers in the case of governments, and donors in the case of not-for-profits. The third parties reads the financial statements to decide whether or not to invest in a business, or to donate to not-for-profit. Businesses have to follow strict guidelines on how they report their financial statements. US business have to follow US GAAP (General Accepted Accounting Principles). Government accounting is not so strict and doesn't follow GAAP.

Managerial accounting is use for management. They don't have to follow any guidelines and are not intended for third parties to read. Another name for managerial accounting is "Cost Accounting". It's about how to cut cost and improve efficiency.

That said, Financial accounting is usually what most businesspeople mean as in accounting. Introduction to accounting is financial accounting; intermediate accounting is financial accounting; most accounting is financial accounting. You should take financial accounting.

1.

The first position is as a Managerial Accountant and the second one as a Financial Accountant. We are looking forward to first interview internal candidates that have the necessary qualifications to become a good fit for the organization.
Job descriptions
Managerial Accountant
* Experienced individual that will forecast information using supporting decision making models and strategic planning.
* Able to deal and persuade Eastvaco’s decision makers and Leadership Team providing meaningful information.
* Handle and prepare confidential information such as Sales forecasts and Budget & comparative analysis.
* Accounting/Management/finance degree preferred. CPA or MBA highly desirable.

Financial Accountant
* Experienced individual that is confortable working with historical data.
* Able to prepare financial statements and reports to be published during the quarterly financial earnings reports which will be relevant to shareholders, creditors, and financial

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.