Users of Accounting Information Defined

Overview: Accounting information is most commonly used by individuals and groups who must make decisions concerning the operations of a business.

Management: In order to maintain a profitable enterprise, management must maintain sufficient funds to meet the entity's liabilities as they become due. Virtually all businesses publish financial statements, which show the financial condition of the company and also indicate whether or not the company is making a profit. 

• Investors use these statements to ascertain the strengths and weaknesses of the company
• Potential creditors study these statements to determine whether the company has sufficient liquid assets, such as cash, with which to repay loans and other types of liabilities. 

Society: Several groups in society, including the IRS, labor unions, and financial analysts, are the stock exchanges are interested in the profitability and operations of the entity.