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What do the Users of Accounts Need to Know?
The users of accounts that we have listed will want to know the sorts of things we can see in the table below: this is not necessarily everything they will ever need to know, but it is a starting point for us to think about the different needs and questions of different users.
| Investors | to help them determine whether they should buy shares in the business, hold on to the shares they already own or sell the shares they already own. They also want to assess the ability of the business to pay dividends. |
| Lenders | to determine whether their loans and interest will be paid when due |
| Managers | might need segmental and total information to see how they fit into the overall picture |
| Employees | information about the stability and profitability of their employers to assess the ability of the business to provide remuneration, retirement benefits and employment opportunities |
| Suppliers and other trade creditors | businesses supplying goods and materials to other businesses will read their accounts to see that they don't have problems: after all, any supplier wants to know if his customers are going to pay their bills! |
| Customers | the continuance of a business, especially when they have a long term involvement with, or are dependent on, the business |
| Governments and their agencies | the allocation of resources and, therefore, the activities of business. To regulate the activities of business, determine taxation policies and as the basis for national income and similar statistics |
| Local community | Financial statements may assist the public by providing information about the trends and recent developments in the prosperity of the business and the range of its activities as they affect their area |
| Financial analysts | they need to know, for example, the accounting concepts employed for inventories, depreciation, bad debts and so on |
| Environmental groups | many organisations now publish reports specifically aimed at informing us about how they are working to keep their environment clean. |
| Researchers | researchers' demands cover a very wide range of lines of enquiry ranging from detailed statistical analysis of the income statement and balance sheet data extending over many years to the qualitative analysis of the wording of the statements |
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