Different Financial Information Needs

The different financial information needs of different user groups.

In order to satisfy the information needs of users from inside and outside the organizations, accounting elaborated a proper method of generalization and synthesizing of information it produces, which involved the development of some appropriate tools, known as financial statements. Both the ASB Statement of Principles for Financial Reporting and the IASB Framework for the Preparation and Presentation of Financial Statements state that the objective of financial statements is to provide information about a company’s financial performance and financial position that is useful to a wide range of users for assessing the stewardship of the entity’s management and for making economic decisions. According to the Framework for the Preparation and Presentation of Financial Statements, different users of financial statements classify into seven groups, including present and potential investors, employees and groups that represent them, lenders and suppliers, customers, governments and their agencies and general public. Financial information is invaluable to all users in different ways, and in the case of Papa Company, it is also not exception. For the year 2005- 2006, Papa Company is responsible to public its financial statements as balance sheet, income statement, etc to provide related users information about the business and operation of company. The purpose of using, also the types of needed information vary from different users group, explained as follow.

1. The internal users of financial statements are individuals who have direct bearing with the organization, including managers and employees.

Employees

The employees and the groups that represent them in general want relevant information on future prospects of the organization, about the financial stability and profitability, on job security and validity of pension plans, on manners and levels of remuneration, on nature and extent of...