General Public Anyone outside the company such as researchers, students, analysts and others are interested in the financial statements of a company for some valid reason. Users of the Financial Statements The main users stakeholders of financial statements are commonly grouped as follows: Boards of directors, to review the performance of management.
Existing equity investors and lendersto monitor their investments and to evaluate the performance of management. Competitors, to benchmark their own financial results.
The public may wish to assess the effect of the company on the economy, local environment and local community. Government agencies responsible for taxing, regulating, or investigating the company.
Suppliers Suppliers often open trade accounts with many companies in the business environment.
These individuals — called financial statement users — often review the information for decision-making purposes. The financial statement is used to formulate contractual terms between the company and other organizations. Know More About Financial Institutions: Employees need this information to determine if they should buy more or hold their current investment level.
They will also have a keen interest in the salaries and benefits enjoyed by senior management. Dublin, Edinburgh, Lisbon, London Rating: In huge organizations, however, management is usually made up of hired professionals who are entrusted with the responsibility of operating the business or a part of the business.
The financial statements of other companies can also provide investment solutions to different companies. In addition to years of corporate accounting experience, he teaches online accounting courses for two universities. Suppliers need to know if they will be paid.
The tax authorities also use financial statements as a basis for assessing the amount of tax payable by a business.
Government agencies need to know how the economy is performing in order to plan financial and industrial policies. Periodic updates are also necessary to ensure borrowers still have the ability to repay loans.World Finance» Financial Report» Financial Statement» Users of Financial Statements Users of Financial Statements Financial statements are intended to be understandable by readers who have “a reasonable knowledge of business and economic activities and accounting and who are willing to study the information diligently.”.
Owners and investors. Stockholders of corporations need financial information to help them make decisions on what to do with their investments (shares of stock), i.e. hold, sell, or. There are various different users of financial statements, each with different information needs.
The Conceptual framework lists the primary users of financial statements as. THE NEEDS OF USERS OF FINANCIAL INFORMATION A USER SURVEY PRO-ACTIVE ACCOUNTING ACTIVITIES IN EUROPE (PAAinE) how useful different forms of financial information are to users in their decision-making process; (b) what improvements to financial information users require; and.
internal controls, improved financial systems, and more accurate and timely financial information.
Additionally, clean audit opinions have resulted in reputational benefits for agency CFOs and their finance departments. financial officers of all publicly traded U.S.
companies to swear (based on their knowledge) that the quarterly statements and annual reports filed with the SEC are accurate and complete. Objective 2: Identify the users of accounting information.Download