In general, the management of the firm is concerned with knowing what products and services are needed and then producing and distributing those products and services to customers. Financial management is concerned with the financial decisions that must be made in order to maximize the wealth of the stockholders. The accounting system provides financial information. Accounting is subdivided into financial accounting and managerial accounting. Finance has traditionally been thought of as the area of financial management that is responsible for the acquisition and disposition of the financial resources.
Financial accounting is a formalized system designed to record the financial history of the firm.
The financial accountant is a historian who records the financial history of the firm. Part of the financial accountant's job is to report the firm's history from time to time to interested individuals, through the firm's annual and quarterly financial statements. Managerial accounting looks forward while financial accounting looks backward. Managerial accounting provides financial information is used to make business decisions. Thus, managerial accounting is oriented toward analyzing financial data for decision making and in forecasting the financial future of the firm.