Accounting is a very powerful tool for a business firm to analyze and make financial data easy to understand for all users of accounting information. There are lots of users and parties analyzing and calculating an accounting information report for their different benefits usage.
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.
What are the Users of Accounting Information
Following are the users or parties interested in financial and accounting Information:
1. Owners
Accounting provides the 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.
2. Managers
Large business organizations and corporate bodies have separated management bodies and Owners (All Shareholders) are not included in management.
Management of such a business organization is more concerned with accounting information because managers are answerable to the owners.
Thus, Managers are responsible for the efficient operations of the business and earning 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.
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.
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.
7. Regulatory Agencies
Different types of agencies and government departments use accounting information for evaluating how well the variance business is 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.
9. Financial Analysts and Advisers
Financial analysts are using accounting information for their analysis and other data calculations for making future planning.
10. Stock Exchanges
Stock exchanges are much interested in the accounting information of a business company.
Because the exchange will use this information to analyze the financial background and road map of the business.
It will create investors’ trust in the company.
11. Trade Associations
Trade associations demand accounting information from businesses and trades to transparent the financial conditions of firms.
Because a big part of a firm is coming from credit facilities and other sources.
It’s very important to make their accounting information accurate to survive.
12. Consumers
A customer is a key to success for a business modal.
So building consumer trust is more important to transparent about their financials in front of a consumer.
Because consumers are now very active and they use this information to invest and also for busing product goodwill.
13. Sociologist
Sociologists are very interested in the accounting formation of a company.
Because there is a lot of information relevant to social activities and it’s very helpful to get socio-economic data from the company.
14. Economists and the Public
Financial or accounting information is very useful for an economist and the public.
An economist will this information to calculate the growth of the company and the future stability of the firm. and the Public is using accounting information for investing in company funds and many other ways to trust a company.
Thus, accounting information is very important and useful for all parties and users for their different needs and usage.
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