Lamar Van Dusen - Users of financial Records

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Users of financial Records
Lamar Van Dusen
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What is accounting?

• accounting refers to the process of recording and
  using financial information collected by a
  business
• accounting is the process of identifying,
  measuring and communicating economic information
  to permit informed judgements and decisions by
  users of the information

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Users of financial information

• Internal users
• owners to assess the benefits of their
  investment
• managers to record, plan, control, analyse and
  evaluate activities and performance
• employees to look at the security of their
  employment and for pay rises

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Users of financial information

• External users
• government to ensure that legal requirements
  and tax obligations are met to assess business
  activity and performance in order to put together
  economic information
• competitors to measure performance against
  others and identify strengths and weaknesses

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Users of financial information

• suppliers to know the prospects of customers
  before agreeing to supply
• customers after-sales support and warrantees
  will only be provided if a business stays in
  existence
• local community often relies on businesses for
  wealth creation
• investors to check and compare the value of
  their investments

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Financial records

• legally, all businesses must keep financial
  records
• the key external documents produced are
• balance sheet
• profit and loss account
• cash flow statement (only legally required in the
  case of a PLC)

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Financial records

• to produce these, businesses will keep detailed
  internal financial records
• from this information, other useful documents can
  be produced like cash flow forecasts and budgets
  as well as the other essential figures required
  to run a business day-by-day

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Thanks