4.2 Accounting versus Finance

Here, we summarize some of the key differences between Accounting and Finance.  

Accounting Finance
Historical  Future-oriented 
Summary of all data Incremental[1] focus
Reporting  Decision-oriented 
Rules-based  Logic 
Legalistic  Managerial

 

 

One is not “better” than the other. You just need to know what each is – in terms of its purpose, in order to deal with them.

 

In the hour when a person is brought before the heavenly court for judgment he is asked:

Did you conduct your business affairs honestly? 

-Babylonian Talmud

Tractate Shabbat 31a


  1. We will discuss the broad meaning of incremental in the Finance context. For now, we mean that the Financial Analyst will focus only on those data, which are relevant to decision-making.

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Introduction to Financial Analysis Copyright © 2022 by Kenneth S. Bigel is licensed under a Creative Commons Attribution 4.0 International License, except where otherwise noted.

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