| Financial accounting aims to provide information | | | | increase demands as well. |
| for both internal and external users-primarily for | | | | Suppliers |
| external information users. Given that external | | | | Suppliers are concerned with whether they should |
| users have a range of information needs, financial | | | | supply an organisation on credit and might want to |
| accounts need to conform to certain standards in | | | | deal with the company as a going concern. |
| order to satisfy them. To that end, the identified | | | | Customers/Clients (and financial advisers/analysts) |
| users of financial accounting information should | | | | Customers would also be concerned with the |
| have their information needs addressed. In that | | | | business being a going concern as far as |
| way, one can determine the context in which | | | | warranties or guarantees are concerned. In a |
| accountants produce financial reports. | | | | commercial bank or investment firm, where |
| Investors | | | | customers are depositors, the financial position |
| Shareholders, partners or institutional investors | | | | and cash flow of the enterprise lets them know |
| base their investment decisions on the financial | | | | how safe their funds are as well. |
| position and profitability of a business. These | | | | Tax authorities |
| investors include current and potential investors in | | | | Tax authorities need to assess chargeable income |
| the enterprise. Current investors would be | | | | of an entity to determine whether the right |
| concerned about the viability of the company or | | | | amount of tax is being levied in a particular year. |
| their return on investment, while potential | | | | Government |
| investors want to know that they are investing in | | | | Government includes all government or state |
| a strong company. | | | | agencies like the Central Bank. These agencies |
| Management | | | | would use financial statements to ensure |
| Managers also use financial accounts, even though | | | | compliance, especially with the representation of |
| management accounts are also privy to them. | | | | the financial position of the business and |
| This is because the highly summarised nature of | | | | accounting standards. The government also uses |
| financial accounts allows management to assess | | | | information from financial accounts for national |
| whether the company's strategic and tactical | | | | statistics such as Gross Domestic Product. |
| objectives are being met. Knowing the position of | | | | Public |
| the company allows them to fine-tune the | | | | Although not everyone in the public might read |
| day-to-day running of the company with | | | | and understand financial accounts, the "public" |
| knowledge of the impact of their decisions on the | | | | merely refers to the rest of society. Business |
| company's strength and viability. | | | | activities affect society and the environment, so |
| Lenders | | | | the public, which includes lobby group, would |
| Creditors prefer to deal with a financially strong | | | | assess the entity as a corporate citizen. |
| company with a healthy cash flow because they | | | | Preparing financial accounts according to Generally |
| are concerned with debt repayment and | | | | Accepted Accounting Practices and International |
| recovery. | | | | Accounting Standards is a good way to ensure |
| Employees | | | | that the information needs of most users are |
| Employees are concerned with whether the | | | | met. Financial accounts also include input from the |
| company will remain a going concern and if they | | | | chairperson of the company and even some |
| may face cutbacks or can ask for wage | | | | non-financial information that could interest the |
| increases. Trade unions normally examine the | | | | public. Naturally, the needs of information users |
| financial position of an enterprise to make wage | | | | help to define the objectives of financial accounts. |