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
- 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. ↵