Users Of Accounting Information
The basic objective of accounting is to provide
information which is useful for persons inside and outside the
organisation.Accounting provides the information to the external and
internal users which may base decisions that results in the allocation of economic resource in society.
External users of accounting information are those groups or persons who are outside the organisation for whom accounting function is performed.Internal users of accounting information are those persons or groups who are inside the organisation.
External users of accounting information are those groups or persons who are outside the organisation for whom accounting function is performed.Internal users of accounting information are those persons or groups who are inside the organisation.
External Users of accounting information :
1. Investors : Those who want to invest money in an organisation want to know the financial health of the organisation. They need accounting information which will help them in evaluating past performance and future prospects of the organisation.
2. Creditors : Creditors means supplier of goods and services on credit , banks and lenders of money who want to know the financial position of a concern before providing loans or granting credit.They need accounting information relating to current assets , quick assets and current liabilities which is available in the financial statements.
3. Members Of Non Profit Organisations : Non profit organisations such as hospitals , clubs , schools, colleges etc. need accounting information to know how their contributed funds are being utilised. This information helps them to make decision regarding future support.
4. Government : Government wants to know earnings or sales for a particular period for the purpose of taxation. Income tax returns are examples of financial reports which are prepared with information taken from accounting.
5. Research Scholars : Accounting information helps research scholars who wants to make a study into the financial operation of a particular firm.
1. Investors : Those who want to invest money in an organisation want to know the financial health of the organisation. They need accounting information which will help them in evaluating past performance and future prospects of the organisation.
2. Creditors : Creditors means supplier of goods and services on credit , banks and lenders of money who want to know the financial position of a concern before providing loans or granting credit.They need accounting information relating to current assets , quick assets and current liabilities which is available in the financial statements.
3. Members Of Non Profit Organisations : Non profit organisations such as hospitals , clubs , schools, colleges etc. need accounting information to know how their contributed funds are being utilised. This information helps them to make decision regarding future support.
4. Government : Government wants to know earnings or sales for a particular period for the purpose of taxation. Income tax returns are examples of financial reports which are prepared with information taken from accounting.
5. Research Scholars : Accounting information helps research scholars who wants to make a study into the financial operation of a particular firm.
Internal Users Of Accounting Information
1. Owners : Business owners want to know whether their funds are being properly used or not. Accounting information helps them them to know the profitability and the financial position of the concern in which they have invested their funds.
2. Management: Accounting information is called the eyes and ears of management.It helps a manager in appraising the performance of the subordinates.
3. Employees : Employees of the organisation can get the actual information about the financial position of their organisation with the help of financial statements prepared by the accountant.
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