Financial accounting relies on accepted principles that are enforced through an extensive set of rules and guidelines; on the other hand, managerial accounting systems are flexible.

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Financial accounting must follow generally accepted accounting principles (GAAP) and are regulated by various accounting bodies, whereas managerial accounting can be customized to fit the specific needs of the organization and does not have to follow GAAP.

Financial Accounting Relies on Accepted Principles That Are Enforced Through