Difference Between Cost Accounting and Financial Accounting

Cost accounting and financial accounting are two different branches of accounting. In order to understand the differences better, the following table will help greatly.

Financial AccountingCost Accounting
It is used to record financial transactions and is used to know the financial position of the company.It is used to control cost and to improve efficiency in the operations.  
It is used to record assets, equity and liabilities according to the applicable accounting standards.  It is used to classify cost into the direct material, direct labour and FOH (Factory Overhead).
Financial accounting works around prescribed rules and regulations.  Cost accounting does not follow any set rules and standards.
Financial statements are necessary to be prepared under the corporate law. Various types of reports are prepared on the discretion of the management. But there is no hard and fast rule to prepare certain types of reports. 
Financial Accounting is a great tool for the management to decide over the matters such as reducing gearing of the company and to increase market share of the company.Cost accounting targets cost control by using methods of over allocation, standard costing, process costing etc.  
Financial statements are demanded by the tax authorities, Governments, Banks, Customers and suppliers. Cosr accounting reports are required by the management for decision making. 
External auditors are hired for expressing their views over the financial position and performance of the company and the true and fair view of the financial statements. Internal auditors are appointed to check the efficiency and effectiveness of the management accounting system.