Which accounting discipline focuses on providing information to outside parties such as stockholders and creditors?

Financial accounting is the discipline that focuses on providing information to outside parties, including stockholders, creditors, and regulatory agencies. This area of accounting is concerned with the preparation of financial statements such as balance sheets, income statements, and cash flow statements, which are used to assess the financial health and performance of an organization.

The primary objective of financial accounting is to present a clear and accurate picture of a company's financial position, complying with standardized guidelines like Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS). This is essential for stakeholders who rely on this information to make informed decisions regarding investments and lending.

In contrast, management accounting is primarily aimed at internal stakeholders, such as managers and department heads, providing information to facilitate planning, control, and decision-making within the organization. Cost accounting focuses specifically on capturing a company’s total production costs and analyzing them for budgeting and control purposes, while tax accounting deals with the preparation and filing of tax returns and planning for tax liabilities. Each of these areas serves a different purpose and audience, emphasizing the unique role of financial accounting in communicating with external parties.