Users of Accounting Information and their information needs

Shareholders

This task should be written on the SAME document as your Task 2, after your work on the accounting standards. As it is not a completely new document, you don’t need to write a full introduction but do have a short paragraph explaining that you are now going to look at the users of accounting information and how the concepts and standards will impact on the needs of the users.

• Shareholders;

• Employees;

• Potential investors;

• Directors;

• Managers;

• Suppliers;

• Customers;

• Lenders;

• Government

I suggest that for now you write each user as a sub-heading and then add 2 different bullet point lists for each user. On one set of bullet points write down what information they need from the financial statements with a note to remind you why, and then a separate list saying which concepts will influence this information.

I will check it and if it is correct then you can write it as a paragraph or two instead of bullet points.

• Profit/loss – To see if the board of directors are running the business well and to know if it is successful or not.

• Expenses – To know what the business is spending so they can see if costs need to be cut.

• Assets – To know how much money the business has invested in assets

• Liabilities – So they can see how much the company owes.

• Comparability and understandability – so they can see if they are making as much as similar businesses to more effectively measure how successful the business is and as they may not be  business people it needs to be understandable so they can know what is happening.

• Consistency – So they can easily compare this years information with previous years to see if the business is doing better or worse than in previous years.

 
• Reliability – So that they know they can trust the information in the accounts. 

Once you have written this and I have checked it you can write it as a paragraph and link it to one or more of the accounting standards.

When you have done all 9 users the task will be complete.