Users of Accounting Information
potential investors, creditors, customers, taxing authorities, government regulation agencies, non-profit organization and public
examples of external users
owner, management and employees
examples of internal users
top-level management, middle-level management and lower-level management
examples of management
type of info needed by potential investors
info that will help them to decide whether *they should invest or not* in the business. through *past performances or operating results of the company*, they would want to know *potential returns of their investment*
type of info needed by employees
information about the *ability of the enterprise to provide REMUNERATION, RETIREMENT BENEFITS, AND OTHER BENEFITS*
type of info needed by employees
information about the *stability and profitability* of the company
taxing authorities
local and national government who levy taxes on individuals and businesses
government regulation agencies
securities and exchange commission (SEC) and bangko sentral ng pilipinas
lower-level management
supervisors and team leaders
owners
they *provide capital to the business*
employees
they are made up of the *workforce* of the company
type of info needed by creditors
they assess the *credit worthiness and the capability of the business to pay its obligation including the interests on MATURITY DATE*
type of info needed by customers
they assess the *financial position of their suppliers* which is necessary to maintain stable source of supply in the long term. they are interested to know whether the business *will continue to honor to product warranties*
type of info needed by employees
they may make *wage demands* based on the accounting information that show their *employees reported income*
type of info needed by middle-level management
they need information to *ensure their unit's performances are aligned with the organization's objectives*
type of info needed by lower-level management
they need information to *oversee day-to-day operations and direct employees in the performance of tasks*
type of info needed by owners
they need information to help them decide whether *they should withdraw or increase their investments*. They are interested to know *the returns on their investment*
management
they plan and organize on behalf of the organization
type of info needed by public
they use financial information *to know how the business affects the economy, possible prospect for employment, and/or for educational and research purposes*
potential investors
they use financial reports in *evaluating what income they can reasonably expect from their investment*
type of info needed by top-level management
they use information to *oversee the perfomance of the whole organization* and sets its strategic direction
type of info needed by government regulation agencies
they want to ensure that *the company's disclosure of accounting information is IN ACCORDANCE WITH THE RULES AND REGULATIONS* set in order to protect the interest of the stakeholders who rely so much on such info
creditors
this group includes *money lenders, suppliers and other trade creditors*. they determine *the borrower's ability to meet scheduled payments*
decision made by internal users
to assess the capability of the business to pay its obligation including the related interests on maturity date
decision made by internal users
to decide whether to afford to give salary increase
decision made by external users
to decide whether to invest in the company or not
decision made by external users
to determine whether debts owed to them will be paid when due
decision made by external users
to determine whether the correctness of the tax return filed by the company
decision made by external users
to ensure that the company's disclosure of accounting information is in accordance with rules and regulations
decision made by internal users
to ensure that the unit's performances are aligned w/ the organization's objectives
decision made by internal users
to find out the financial capacity of the company in order to bargain for benefits
decision made by external users
to know how the business helps the economy
decision made by internal users
to plan, organize and run the business
decision made by internal users
to withdraw or increase their investments
internal users
users who are *directly involved* in the business enterprise
external users
users who are *not directly* involved in the operation of the business
type of info needed by taxing authorities
want to know whether the company complies with the tax laws
top-level management
chief executive officer (CEO), chief financial officer (CFO), and chief operating officer (COO), among others
non-profit organizations
churches, most hospitals, government agencies and colleges
middle-level management
department heads, branch managers, and junior executives, among others
