Who Are The User Groups Of Financial Statements And Their Varying Individual Requirements For Information?

The syllabus for AS & A Level Accounting on Financial Reporting and Interpretation require candidates to understand:

(a) Who are the different users of the Financial Statement.
(b) What are different users requirements for information.


(a) The different users of the financial statement:-

• including management, shareholders, employees, potential investors, creditors, government, public and environmental bodies.

Next, we can further split the different users into two major groups namely:-

Internal Users:

Which includes management, shareholders, employees,


External Users:-

potential investors, creditors, government, public and environmental bodies.

(b) Below are a snapshot of the users and their varying requirements pertaining to the interpretation of the financial statement:-

THE USERS OF FINANCIAL STATEMENT

INTERNAL USERS GROUP:

Employee group: Assessing security of employment
Management group:Monitoring the performance of the business.


EXTERNAL USERS GROUP:

Analyst-adviser group: Assessing their investment

Business contact group: For the suppliers: likelihood of future supply and for the customers: reliability of future supply

Equity Investor group: Assessing their investment

Environmental bodies: assessing the impact, companies has done to the environment like water, air pollution ,etc in the quest to maximize profits.

Government: Collection of tax and for economic statistics

Loan Creditor group: Assessing the ability to make repayment of loan

Public: Assessing impact on local economy.