1. Internal Users
- Owners: The owners of an organization contribute their savings as capital in the business. Therefore, the owners are exposed to the risks involved with the business and, hence, want to ensure the safety of their capital.
- Employees: The employees of an organization are interested in the accounting information to determine the ability of the firm to pay their bonuses and salary.
- Management: The management of an organization has to make various decisions for its success, growth, and accomplishment of goals. For this, the management uses the accounting information to make certain essential decisions.
2. External Users
- Investors: Investors are the people or groups of people who invest their money in organizations. These investors want to know about the earning capacity of the organization so they can decide the safety and risk level of investing in an organization.
- Banks and Financial Institutions: The banks and financial institutions provide loans to different businesses. They use the accounting information to ensure the repayment of their loan.
- Creditors: Creditors provide an organization with goods on credit. They take the help of accounting information to understand the credibility and financial soundness of the organization to pay their money.
- Consumers: Consumers use the accounting information of an organization to establish good accounting control over the business that can reduce the production cost.
- Government: The Government uses accounting information to determine and assess the tax liability of an organization.
- Researchers: Researchers use the accounting information of an organization to complete their research work and provide actual facts and figures in their work.
Introduction to Accounting