USERS OF ACCOUNTING INFORMATION

✍️There are two types of users of accounting information and they are:

(a)  Internal users

(b) External users.

Let us discuss the above in details.

(a) Internal users of accounting information

1.      Managers: Managers need accounting information to know the growth of the organization, to compare another budget with the actual result, to evaluate their performance etc.

2.      Finance Directors: Finance director needs accounting information to know the financial condition of the organization, to collect funds and effective and efficient italicization of that fund. He makes the investment decisions.

3.      Company officers: Then need accounting information to do everyday work to achieve the goals of the organization.

4.      Production supervisors: Then needs accounting information to know the growth of production to compare the budget with the actual result to evaluate their performance etc.

5.      Employees: Employees of the organization required to know the accounting information for the evaluation of the outcome of the organization and for the appraisal of their performance during the year. 

(b) External users of accounting information

1.      Investors: Every investor might use accounting information regarding that business.

2.      Creditors: Creditors (Such as suppliers, banker, NGOs, cooperative societies and other financial institution) use accounting information to evaluation the risk of granting credit or lending fund.

3.      Tax authority: Tax authority uses accounting information to the complex tax liability of the respective organization.

4.      Regulatory agency:  Regulatory agency monitor whether the companies organization are operation within prescribed rules

5.      Labour unions: Labour unions want to know whether the owner can pay increased wages and benefit to the employees of the organization.

6.       Customers: Customers are   interested in whether a company will continue to honor product warranties and extended its product lines.

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