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Name
of User
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Decision-Making
Purpose
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Owners
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As the owners (Shareholders) have entrusted their financial resources
(Capital and reserve etc.) to the entity i.e. (Capital management of the
entity) their interest is immense.
They are inclined to know periodically its performance. Managers are the custodians of their
capital. The management has every
responsibility to submit periodical financial reports to the proprietors.
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Managers
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Managers are responsible for the
overall performance of the company.
Managers make several decisions and, therefore, need information. Financial accounting provides relevant data
and information in which managers have a direct interest.
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Creditors
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Creditors supply financial resources to
the concern. Creditors are interested in the continuing profitable
performance of the entity in order that they may continuously receive their
interest and repayment of principal amount.
Creditors required financial accounting information to evaluate the
performance enterprise and determine the degree of risk to which they are
exposed.
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Employees
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Employees of a company make use of
financial accounting information revealed in the annual reports. They can bargain on matters regard to salary
enhancement, bonus, fringe benefits, or working conditions, employee stock
options (ESOP) etc. They get insight
into matters affective their economic and social interests. They get satisfaction, both economically,
socially and brand satisfaction.
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Investors
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Potential investors (i.e. Creditors or
owners) get an idea about the company’s performance from its annual
reports. They are generally interested
in the earnings, dividend and growth trends, potential investors take the
services of financial analysts in evaluating the performance of the company.
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Customers
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Customers might be very much interested
in the financial and accounting information would help them to estimate and
evaluate the prices being changes on the products the company usually sells out
to customers and consumers.
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Government
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Government is interested to look into
the financial reports of a company for regulatory purposes. The Income Tax department of the Government
has an interest to evaluate the accounting information in determining the
taxable income of the entity. Taxation
authorities need financial information to ascertain tax liability of a
company. Government and regulatory
authorities are concerned with the financial activities of business
organizations for the purposes of regulation to protect the public interest.
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