Many peoples are interested in the financial information provided by your accounting books and reports and statements. These parties are called users of financial and accounting information.
Users of Financial and Accounting Information
Following are the Persons or Users or Parties interested in Financial and Accounting Information:
1. Owners
Accounting provides necessary information to the owners of the business.
So, that they can know the results of business operations and financial position, Owners are interested in the Safety of their investment as well as in reasonable returns Thereon.
Read more: Top 4 Types of Financial Statements For Reporting
2. Managers
Large Business Organisation and corporate bodies have separated management body and Owners (All Shareholders) are not included in Management.
Management of such a business organization is more concerned with the accounting information because managers are answerable to the owners.
Thus, Managers are responsible for the efficient operations of Business and to Earn maximum returns on capital employed.
3. Potential Investors
Investors ask concerned with the Profitability And Safety of their investments.
They derive the information from the published Accounts.
They also want to know whether the business will survive and pay Attractive dividend bonuses etc or not.
Related: Top 9 Types or Sub-fields of Accounting (Explained)
4. Government
Financial statements of the business become the basis of government for future Tax Planning, production, price control, import-export facilities, Grants, license policy, etc. 18 Reasons and Importance of Product Innovation (Explained).
5. Employees and Labour Unions
Employees and level unions are interested in business information as the basis for supporting Wages’ demands.
Which are demands they are interested in the earning of the enterprise because the increase in wages and payment of bonuses depends on the size of profit earned?
6. Trade Creditors
Creditors for the supply of goods, Creditors for Expenses and other short term and long term creditors are interested in liquidity and stability.
They would be satisfied if their payments are made on time.
Related: Departmental Stores Accounts: Explanation, Importance.
7. Regulatory Agencies
Different types of agencies and Government Departments use Accounting information for Evaluating how well the Variance business are Operating under Regulatory legalization. they also use accounting data as a basis for Assessment.
8. Researchers
Accounting information I also used by Research Scholars in their research work. They do research on business affairs and practice and give suggestions for making decisions.
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9. Other Users
In addition to above 1. Financial Analysts and Advisers, 2. stock exchanges 3. Trade Associations 4. Consumers 5. Sociologist and 6. Economists and the Public at large are the Uses of Accounting Statements.
Thus, Now you know all the Users of Financial and Accounting Information.
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