INTERNAL AND EXTERNAL USERS

• Internal Users


  • Owners
  • Management
• Owners


  Contribute capital in the business and thus are exposed to maximum risk, interested in knowing the profit earned or loss incurred and the safety of their capital
• Management


  Makes extensive use of accounting information to arrive at informed decisions such as determination of selling price, cost controls and reduction, investment into new projects
• External Users


  • Employees and Workers
  • Banks and Financial Institutions
  • Investors and Potential Investors
  • Vendors
  • Government and Its Authorities
  • Consumers
• Employees and Workers


  Entitled to bonus at the year-end, which is linked to the profit earned by an enterprise, interested in financial statements to ensure the enterprise has deposited its dues towards Employees' Provident Fund and Employees' State Insurance
• Banks and Financial Institutions


  Provide loans to businesses, watch the performance of the business to know whether it is making progress to ensure the safety and recovery of the loan advanced, assess it by analysing the accounting information
• Investors and Potential Investors

  Investment involves risk and they do not have direct control over the business affairs, rely on the accounting information available to them and seek answers to questions such as what is the earning capacity of the enterprise and how safe is their investment
• Government and Its Authorities

  Make use of financial statements to compile national income accounts and other information, take policy decisions, assess correct tax dues after an analysis of the financial statements
• Consumers


  Require accounting information for establishing good accounting control so that cost of production may be reduced with the resultant reduction in the prices of products they buy, government needs accounting information to fix fair prices so that consumers and producers are not exploited