CHAPTER III

USERS OF ACCOUNTING INFORMATION

DECISIONS MADE USING ACCOUNTING
USER DEFINITION EXAMPLES INFORMATION/ BENEFITS FROM ACCOUNTING
INFORMATION
INTERNAL USERS
Management - Employees that can make decisions for Board of Directors Accounting information is vital for
the company Top Management making business decisions; allows
Middle-level managers
- Considered the brain of the company Supervisors management to identify problems
immediately and to respond
accordingly
Employees - Persons in the company aside from the Laborers Whether or not business is
management and owners Field workers profitable enough to provide
Non-managerial
- Do not have authority to implement employees compensation and other benefits
decisions
Owners/ - Existing investors of the company Founders Whether or not returns are being
Stockholders - Concerned mostly with profits Partners earned from investments;
Proprietors

EXTERNAL USERS
Customers - Main source of income of businesses Patrons Whether or not to build
- Acquire goods and services for a fee Clients relationship with the business or to
Public
have any dealings with the business
Creditors - Providers of additional funds when the Banks Whether or not to lend resources
initial investment of owners is exhausted Lending Companies to the business and try to see if the
Wealthy individuals
- Lend resources to business usually in Government such is not very risky before lending
the form of money (sometimes lend funds
resources)
Potential - Providers of additional funds when the Wealthy individuals Whether or not to invest in the
Investors initial investment of owners is exhausted Other businesses which business; primary concern is the
plan to invest
- Invest resources in the business hoping ability of the business to provide
to earn decent returns acceptable returns
Government - Regulates the business Government agencies Oversees business operations with
- studies financial statements to Taxing authorities the goal of improving the economy;
Government officials
determine amount of taxes payable checks the accuracy of the financial
statements to compute correct
amount of taxes payable
Academe - Uses accounting information for Professors Discovery of loopholes and possible
academic purposes Lecturers improvements in the field of
Students
Researchers accountancy
General - Uses accounting information to gauge Citizens Whether or not the overall
Public the condition of the economy Residents economy is doing well; Accounting
Common People
- They do not necessarily plan to transact information is used to estimate
with the business economic performance