Describe the informational needs of external users.
Describe the informational needs of external users.
Accounting information is used by various users as per their requirement. The informational needs vary from person to person and they all want to get their trust satisfied with the information available. Here are some of the external users of accounting information and their informational needs
(i) The creditors (lenders) as an external user of the accounting information want to know if they are likely to get paid and look particularly at liquidity, which is the ability of the company/ organisation to pay its debts as they become due.
(ii) As an external user of accounting information, the prospective investor who seeks investment opportunity use them to assess whether or not to invest their money in the company/organisation.
(iii) As an external user of the accounting information, the government and regulatory agencies such as Registrar of companies, Custom departments, IRDA, RBI etc., require information for the payment of various taxes such as Goods and Services Tax (GST), Income Tax (IT), Customs and Excise duties for protecting the interests of investors, creditors (lenders) and also to satisfy the legal obligations imposed by the Companies Act, 1956 and SEBI from time-to-time.
Accounting information is used by various users as per their requirement. The informational needs vary from person to person and they all want to get their trust satisfied with the information available. Here are some of the external users of accounting information and their informational needs
(i) The creditors (lenders) as an external user of the accounting information want to know if they are likely to get paid and look particularly at liquidity, which is the ability of the company/ organisation to pay its debts as they become due.
(ii) As an external user of accounting information, the prospective investor who seeks investment opportunity use them to assess whether or not to invest their money in the company/organisation.
(iii) As an external user of the accounting information, the government and regulatory agencies such as Registrar of companies, Custom departments, IRDA, RBI etc., require information for the payment of various taxes such as Goods and Services Tax (GST), Income Tax (IT), Customs and Excise duties for protecting the interests of investors, creditors (lenders) and also to satisfy the legal obligations imposed by the Companies Act, 1956 and SEBI from time-to-time.
