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Users of accounting information (Financial analysts (Include stockbrokers,…
Users of accounting information
Managers
The people appointed to manage an organisation's day to day activities and operations
Need information about the organisation's past, current and future financial position to allow them to carry out the key elements of successful management - planning and controlling their operations
Shareholders
The owner's of the business who provide the money needed to start and keep the business operation
May not be involved in the day-to-day operations of the business, but need to know if their business is making a profit and if that profit is satisfactory and how it is to be allocated
Lenders of finance
They will want to know if their monies are safe
Includes banks, which provide long term loans and need to be assured that the business will be able not only to make interest payments but also to repay the principal when required
Financial analysts
Include stockbrokers, financial advisers and financial journalists
Want to be able to assess whether or not the business is a good investment
Assess what potential profit investors can expect from their investment
They review accounting information provided from a number of sources such as the annual accounts and statements made to the media
Suppliers
Provide goods and services to an organisation
Want to know if they are going to be paid and how quickly
The financial information provides data on how long a company takes to pay its bills
Government bodies
Such as the local and national taxation authorities
Need some idea of how much taxation the organisation owes to allow government bodies to plan how much they have to spend and to ensure that accounting records copy with the law
Uses accounting information for the regulation of industry and compilation of national statistics
Customers
If they are going to do business with an organisation they want to know if it is financially able to continue in existence
It is essential that a customer who purchases goods or services from the organisation has confidence that will be able to have a regular supply of the goods or services
May also be in a dependancy relationship if they have product warranties/guarantees or need replacement of specialist parts
Employees
Rely on the organisation to provide their principal source of regular income
Use financial information to assess their job security and the organisation's ability to make pay awards
Past employees are interested in their pensions
Potential eployees may require accounting information to assist their decision to join an organsiation
General public
May have a wider interest in the financial performance of an organisation
Might be interested to know if the business is spending sufficient money to protect the environment from damage caused by the business's production processes