Cost accounting involves creating reports that can be in any format specified by management. There is no regulatory framework governing cost accounting reports so they can be tailor made to suit a certain costing need or managerial demand.
Cost accounting reports are voluntary and created with the intention of including only that information pertinent to a specific decision or situation. The reports prepared under financial accounting are highly specific in their format and content. The structure of financial accounting reports is tightly governed by either generally accepted accounting principles or international financial reporting standards.
Financial reports are a statutory requirement and ensure a business’s accounting standards are compliant.
