Who are the two users of financial information?

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Ressie Franecki asked a question: Who are the two users of financial information?
Asked By: Ressie Franecki
Date created: Thu, Jun 10, 2021 12:24 AM
Date updated: Thu, Jun 23, 2022 9:46 AM

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Top best answers to the question «Who are the two users of financial information»

Internal users are people within a business organization who use financial information. Examples of internal users are owners, managers, and employees. External users are people outside the business entity (organization) who use accounting information.

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There are many possible users of the financial information generated by a business. The following list presents the more likely users: Customers. Major prospective customers will want to review a firm’s financial information to see if it is stable enough to be a long-term supplier, or if the firm has the financial resources to complete a major project on their behalf. Employees.

Outside analysts want to see financial statements in order to decide whether they should recommend the company's securities to their clients. Investors. Investors will likely require financial statements to be provided, since they are the owners of the business and want to understand the performance of their investment. Lenders.

Following are the secondary users of accounting information: 1. Investors – They may be current investors, minority stakeholder, potential future investors, etc. They use it for 1. 2. Lenders – Banks and Non-banking financial companies which provide loans in the form of cash or credit are termed ...

Internal users are people within a business organization who use financial information. Examples of internal users are owners, managers, and employees. External users are people outside the business entity (organization) who use accounting information. Examples of external users are suppliers, banks, customers, investors, potential investors, and tax authorities.

Internal users include managers and other employees who use financial information to confirm past results and help make adjustments for future activities. External users are those outside of the organization who use the financial information to make decisions or to evaluate an entity’s performance. For example, investors, financial analysts, loan officers, governmental auditors, such as IRS agents, and an assortment of other stakeholders are classified as external users, while still having ...

The management of the company is the first and foremost user of the financial statements. Although they are the ones who prepare the financial statements, the board and the management need to refer to them while considering the progress and growth of the company.

AQA, Edexcel, OCR, IB. The financial accounts provide a wealth of information that is useful to various users of financial information. Investors. Investors are concerned about risk and return in relation to their investments. They require information to decide whether they should continue to invest in a business.

Accounting is very much essential for calculating profit and loss and to prepare the balance sheets. Generally, their are two types of users of accounting information in the society i.e. internal users and external users.

These individuals — called financial statement users — often review the information for decision-making purposes. Financial accounting information also helps users measure a company’s profitability and performance. Interested parties include owners, lenders, employees, suppliers and government agencies.

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