Summary
Highlights
Accounting helps individuals and organizations make better financial decisions. This video will explore who the users of accounting are and what information they require.
Internal users are those within the organization, including owners, managers, and employees. Owners need accounting information to assess profitability and risk. Managers use it for budgeting, monitoring performance, and making business decisions. Employees are interested in job security and income implications based on company performance. The finance department prepares this information for other users.
External users are outside the organization and include investors, lenders, suppliers, customers, tax authorities, government, auditors, and the general public. Investors use financial statements to assess profitability, risk, and worth of their investments. Lenders and suppliers assess creditworthiness. Customers evaluate a supplier's ability to deliver goods and services reliably. Tax authorities review declarations for correct tax amounts. Government agencies monitor compliance with regulations. Auditors inspect financial statements for accuracy. The general public, including journalists and analysts, may also be interested in a company's accounting information.