(20)-NEED OF ACCOUNTING INFORMATION (EXTERNAL PARTIES)

Need of Accounting Information (External parties)

We can identify external parties as below,

1. Trade contacts.
2. Providers of finance to the company.
3. Employees of the business.
4. The Inland Revenue.
5. Government and their agencies.
6. Financial analysts and advisers.
7. The public.

Trade Contacts

This includes suppliers who supply goods and customers who purchase the goods or services. Suppliers want to know about ability to pay debts; customers want to know that the company is a secure source of supply.

Providers of finance to the business

These include long term loans and short term overdraft the bank or financial institution want to know and ensure that the company is able to keep up with interest payments and repay the amount advanced.

Employees of the business

They want to know about financial situation, because their careers and size of their wages depend on it.

The Inland Revenue

They want to know about profit of the company.

Government and their agencies

They are interested in the allocation of resources and therefore in the activities of enterprises.

Financial analysts and advisers

Financial analysts and advisers, who need information for their clients or audience,

The public

Public wants to know affect members of the public.