Accounting plays a very important role in every business, but not just a business that can find useful accounting information. There are other stakeholders who rely on accounting information to make decisions. These are the following:
1. Shareholders – Shareholders use the balance sheet and profit and loss account of limited liability companies to decide whether to increase or decrease their holdings. Management – At all levels of management, from the department level to the supervisory level, it depends on the accounting information to perform their work properly. All of them use the same information for different purposes. For example, directors are used for strategic purposes and middle management can use it to make sure they meet their financial goals
. Suppliers – Together with the other data providers, examine the company's balance sheet and profit and loss account to determine how lenders provide credit to current and potential customers
. Creditors – Like suppliers, lenders also need to make sure that a company is in a healthy financial position before they start making money.
5th Government – Governments use information on the company's financial position to impose taxes on profits
. Customers – Before another company becomes a customer or a joint venture, they examine the company's finances to make sure that the company is not in trouble and that stocks do not dry.
7th Employees – Employees also have an interest in their employer's work and therefore use financial accounting information for this purpose.
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