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(19)-NEED OF ACCOUNTING INFORMATION (INTERNAL PARTIES)

Thursday, November 5, 2009

Need of Accounting Information (Internal Parties)

There are two main internal parties need accounting information in business,
  1. Managers Of the company.
  2. Shareholders of the company.

Managers of the company

Managers of a business need the most information, to help them take their planning and control decisions, and they have special access to information about the business, because they can get people to give them the types of statements they want.

These people appointed by the company’s owners to supervise day to day activities of the company. They need information about the company’s financial situation as it is currently and as it is expected to be in the future.

When managers want a large amount of information about the cost and profitability of individual products or different parts of their business they can arrange to obtain it through a system of cost and management accounting.

Shareholders of the company

These will want to access how effectively management is performing its stewardship function. They want to know profitability of the company and how much profit they can afford withdraw from the business for their own use.

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