Parties Interested in Accounting Information

Accounting information is not prepared only for the owner of the business — a wide range of parties, both inside and outside the organisation, rely on it for their own purposes.

Internal parties

• Owners / Proprietors / Partners — to know the profit or loss earned and the value of their investment in the business.
• Management — to plan, control operations, and take day-to-day and strategic decisions.
• Employees — to judge the stability and growth prospects of the business (which affects job security, wages, and bonus).

External parties

• Creditors and Suppliers — to judge whether the business is able to pay for goods supplied on credit.
• Banks and Financial Institutions — to decide whether to lend money, and on what terms.
• Investors and prospective investors — to decide whether to invest in, or continue holding an interest in, the business.
• Government and tax authorities — to assess income tax, GST, and other statutory dues correctly, and to compile national economic statistics.
• Researchers and analysts — to study business trends, industry performance, and the economy generally.

The table below groups these parties by the KIND of decision accounting information typically helps them make.