Users of Accounting information

The basic objective of accounting is to provide information which is useful for persons and groups inside and outside the organisation. i. internal users: Internal users are those individuals or groups who are within the organisation like owners, management, employees and trade unions. ii. external users: External users are those individuals or groups who are outside the organisation like creditors, investors, banks and other lending
institutions, present and potential investors, Government, tax authorities,
regulatory agencies and researchers.
The users and their need for information are as follows: Users Need for information internal i. Owners

ii. Management

iii. Employees and Trade unions

To know the profitability and financial soundness of the business. To take prompt decisions to manage the business efficiently. To form judgement about the earning capacity of the business since their remuneration and bonus depend on it.
external i. Creditors, banks and other lending institutions ii. Present investors
To determine whether the principal and the interest thereof will be paid in when due.

To know the position, progress and prosperity of the business in order to ensure the safety of their investment.
iii. Potential investors iv. Government and Tax
authorities v. Regulatory agencies
vi. Researchers
To decide whether to invest in the business or not. To know the earnings in order to assess the tax liabilities of the business. To evaluate the business operation under the regulatory legislation. To use in their research work. Users of Accounting information Owners
Employees and Trade Unions
Creditors, Banks & Lending Institutions
Present InvestorsPotential

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