ACCA Applied Knowledge · Business and Technology · Accounting and finance functions within business organisations
Which of the following is a characteristic of financial accounting rather than management accounting?
External audit of annual financial statements for larger companies is a feature of financial accounting. Management accounting is internal, produced on demand for segments and often includes non-financial data, and it is not subject to statutory audit requirements.
- AReports are produced for individual products, departments or customers as managers request them
- BAnnual financial statements are subject to external audit for most companies of significant sizeCorrect
- CInformation may include non-financial data such as machine hours and customer complaints
Explanation
Statutory financial statements of larger companies are subject to external audit. Management accounting reports are internal, need not be audited, and often include non-financial measures and segment detail on request.
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