Accountancy · Ch 1 — Introduction to Accounting
Users of Accounting Information
5
Users of Accounting Information
Users of accounting information are classified as internal (inside the organisation) and external (outside it).
| Internal users | What they need it for |
|---|---|
| Owners/Shareholders | To know the return on their investment and the safety of their capital |
| Management | To plan, control costs, fix prices, and take day-to-day and strategic decisions |
| Employees | To assess job security, and as a basis for bonus/wage negotiations |
| External users | What they need it for |
|---|---|
| Investors and potential investors | To decide whether to buy, hold or sell shares |
| Lenders/Banks | To assess creditworthiness before extending a loan or overdraft |
| Creditors and suppliers | To decide whether to extend trade credit and on what terms |
| Government and tax authorities | To assess and collect income tax, GST and to compile national statistics |