Internal users: 

Management- Need accounting information(Mgt a/c) to ensure that the different functional areas of the organisation are working together as a corporate body to achieve overall objectives of the organisation rather than their own individual objectives.

Employees-interest lies in seeing that the company keeps on operating (job security), also they want to know if the company is being fair to them ie they are getting a reasonable share of the profit their effort is generating.

 Trade Unions– They used the published accounts to decide when to press management for better remuneration and improved condition of service

External Users:

Shareholders– Two kinds of needs – stewardship(how their funds is being used) and investment ( when to buy more shares or sell off their shares)

Bankers- Assess the liquidity of the company.

Creditors- Interested in the liquidity of the company to help them assess if the company will be able to pay them as and when their liability falls due.

Government agencies-GRA– For statutory obligation purposes like payment of corporate taxes.

Stock Market-Regulate the companies and so are interested in their financials.

• To allow decisions to be made for the good of the company on the value of share-holders investments and the income they derive from their shareholding.
• To allow employees to look for alternative work in a different company, or look for pay increases and promotions based on the financial health of the company.
• To allow trade payables and banks to identify if the company can meets it financial obligations and commitments to them.
• To allow government agencies like revenue Commissioners and Central statistics office make relevant decisions and take needed action.
• To allow accountants audit or prepare tax returns on behalf of the company.

The people who might be interested in financial information about the company may be classified as follows.

• Shareholders in the company. They will be interested in the company’s profitability and its ability to pay dividends. They will also be interested in the company’s long term prospects.
• Managers of the company. These are people appointed by the company’s owners to supervise the day-to-day activities of the company. They need information about the company’s financial situation as it is currently and as it is expected to be in the future. This is to enable them to manage the business efficiently and to take effective control and planning decisions.
• Trade contacts, including suppliers who provide goods to the company on credit and customers who purchase the goods or services provided by the company. Suppliers will want to know about the company’s ability to pay its debts; customers need to know that the company is a secure source of supply and is in no danger of having to close down.
• Providers of finance to the company. These might include a bank which permits the company to operate an overdraft, or provides longer-term finance by granting a loan. The bank will want to ensure that the company is able to keep up with interest payments, and eventually to repay the amounts advanced.
• The tax authorities, who will want to know about business profits in order to assess the tax payable by the company on its profits and any sales taxes.
• Employees of the company. These should have a right to information about the company’s financial situation, because their future careers and the size of their wages and salaries depend on it.                                                                             (Any 4)

• Investors are those who provide risk capital i.e. mainly shareholders. They are concerned with the risk inherent in and the return provided by the business. They need information to help them determine whether they should buy, hold or sell their holdings. They also need information to assess the ability of the business to pay dividends.
• Employees of the business and their representative groups are interested in information about the stability and profitability of their employer. They need to assess the likelihood of future employment and increase or decrease in remuneration packages. They will also be interested in retirement benefits and employment opportunities/advancement.
• Lenders: These consist of debenture holders, banks, lessors, other financial institutions, other businesses etc. They are interested in information that enables them to determine whether their loans, and the interest attached to them, will be paid when due.
• Suppliers and other trade payables: These are people the business owes money to. They are interested in information that enables them to determine whether amounts owing to them will be paid when due. Many suppliers will also be interested in the long term survival of the business if the business is their major customer.
• Customers or trade receivables: Customers have an interest in information about the continuance of the business especially if they have bought goods with guarantees etc. if the business is a major supplier of goods to them they will wish to know that that supply will continue into the future.
• Governments and their agencies: Governments are interested in the allocation of resources within a country and of course the collection of revenues such as taxes from individual businesses. They will require information on the activities of the business to regulate them, determine taxation policies and assess the basis for national income and similar statistics.
• The general public: The most interested ‘public’ are generally those that live in close proximity to the business. They will wish to know if the business makes a contribution to the local economy and what effect it has on the local environment, for example in terms of pollution. They will wish to know the number of people the business employs from the locality, their patronage of local suppliers and the possible effect on the locality if the business ceases to operate.                       (Any 5)

a) Investors are those who provide risk capital i.e. mainly shareholders. They are concerned with the risk inherent in and the return provided by the business. They need information to help them determine whether they should buy, hold or sell their holdings. They also need information to assess the ability of the business to pay dividends.
b) Employees of the business and their representative groups are interested in information about the stability and profitability of their employer. They need to assess the likelihood of future employment and increase or decrease in remuneration packages. They will also be interested in retirement benefits and employment opportunities/advancement.
c) Lenders: These consist of debenture holders, banks, lessors, other financial institutions, other businesses etc. They are interested in information that enables them to determine whether their loans, and the interest attached to them, will be paid when due.
d) Suppliers and other trade payables: These are people the business owes money to. They are interested in information that enables them to determine whether amounts owing to them will be paid when due. Many suppliers will also be interested in the long term survival of the business if the business is their major customer.
e) Customers or trade receivables: Customers have an interest in information about the continuance of the business especially if they have bought goods with guarantees etc. if the business is a major supplier of goods to them they will wish to know that that supply will continue into the future.
f) Governments and their agencies: Governments are interested in the allocation of resources within a country and of course the collection of revenues such as taxes from individual businesses. They will require information on the activities of the business to regulate them, determine taxation policies and assess the basis for national income and similar statistics.
g) The general public: The most interested ‘public’ are generally those that live in close proximity to the business. They will wish to know if the business makes a contribution to the local economy and what effect it has on the local environment, for example in terms of pollution. They will wish to know the number of people the business employs from the locality, their patronage of local suppliers and the possible effect on the locality if the business ceases to operate.                                 (Any 4)