Users of Financial Information and Accounting Concepts

Accounting Coursework
Questions

Question 1
The 5 main users of financial information who has a keen interest in knowing the
financial state of the company those are as follows-
Employees- Such users wants to review the bookkeeping information for making suitable
decision in relation to whether organization is stable or not. Facilitating such data to employees
could increase their level of interest & participation in concern. They shows interest in knowing
the manner in which company would be performing as it can have implication for work income
& security (van Helden and Reichard, 2019). Many of the staff reviews information in final
report for developing better understanding of an entity’s success. Probable employees are also
been concerned in learn about financial e state of an enterprise as they aspire in joining in future.
Managers- They needs accounting information in planning, making suitable business
decisions and monitoring the business activities. They require financial information in allocating
human, financial & capital resources for competing business requirements through the process of
budgeting. Framing and monitoring the budgets in effective manner needs reliable accounting
data in relation to several activities, products, processes, segments, departments and services of
business (Mazina, 2018). The management needs such information for monitoring business
performance through comparison over previous performance, KPI, competitor analysis &
industry benchmark. They rely on the financial data for forming their dealing related decision
like financing, pricing and investment decisions.
Investors- They need to know the way in which their investment is been performing and
they primarily relies on final report published by firms for assessing profitability, risk &
valuation of their respective investment (Kanakriyah, 2016). They make use of accounting
information for determining whether a particular investment is best for their collection &
whether they must decrease, boost or hold their venture in the company.
Lenders- Such type of users has interest in monetary information of the borrowers for
analyzing their credibility that is ability in paying back the amount of loan taken. They offer
loans & other type of credit services on the terms which are mainly based on analysis of
economic state of the borrowers (McLeod, 2020). Good financial condition is been indicated by
borrowers ability in paying its liabilities on the basis of time, substantial securable liquidity &
assets, high profitability.
Government- They also act as the main users of financial information and need
accounting data for ensuring that an enterprises discloses all the material information and
presenting the information as per the accounting standards and regulations which are in place for
protecting an concern of several stakeholders who relies on such type of information in order to
form the decisions (Darma and et.al., 2018). They monitors & defines the accounting thresholds