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    Accounting information for different users

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    Who are the different users of accounting information? What are the differences between managerial and financial accounting? What is the role of the CPA and how does it differ from other accountants? What is the value of the accounting function in your organization, both internally and externally?

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    Dear student,
    Who are the different users of accounting information? What are the differences between managerial and financial accounting? What is the role of the CPA and how does it differ from other accountants? What is the value of the accounting function in your organization, both internally and externally?

    1. Banks and financial institutions: Banks and financial Institutions who have given or who are planning to provide financial assistance by way of short term and long term loan use the accounting information. Banks will look for the profitability and the liquidity position of the company. Banks will see the net profit earned by the company, amount of other borrowings made by the company, amount of interest currently being paid by the company and also the current assets and current liabilities position of the company. If it is satisfactory, then they will provide financial assistance to the company.
    2. Shareholders and prospective investors: Shareholders of the company uses the accounting information in the financial statements of the Company. Shareholders use the accounting information to know the amount of net income earned by the company, the amount of earnings transferred to retained earnings account and the amount of dividend. On the basis of the earnings and dividends, the shareholders can judge the financial position of the company and can compare with the earnings and dividends of other companies. If the return is more, shareholders will be tempted to buy more shares and the market price of the shares will increase. On the other hand, if return is less, then shareholders will tend to sell their shares which will tend to reduction in the market price of the shares. Prospective investors also use the accounting information. Prospective investors will see the net income earned by the company, retained earnings of the company and the profit earned by the company during previous years. If the earnings of the company show the progressive trend, then prospective investors will invest in the shares of the company.
    3. Employees of the company: Employees of the company also use the accounting information to see whether financial position of the company is strong .They also see whether the proper share is given to them from the growth of the company by way of increments and bonus.
    4. Income tax authorities: Income tax authorities use the accounting information in the financial statement to see whether the net income has been arrived at as per the provisions of the Federal law and also to ...

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    The accounting information for different users are examined.

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