Internal and External Users of Accounting Information

Internal and External Users of Accounting Information Accounting Information Accounting information is a variety of aspects that provide a complete picture of the performance and financial situation of a company or organization. Indrastuti Ristiyani, et al. in Fundamentals of Accounting and Institutional Finance (2023) call information consists of: Statement of financial position Statement of profit and loss and other comprehensive income Statement of changes in equity Cash flow statement. In addition to the data, accounting information reports also contain detailed records of daily transactions, accounting policies, and non-financial information. This information includes the number of product units produced by the company, operational efficiency, and other performance indicators. Internal Users of Accounting Information According to Derri Benarli Nugraha, et al. in Accounting Information Systems (2023) accounting information that is usually used by internal parties is a mixture of management information and financial accounting. Accounting information is used by internal parties to make decisions within the scope of the organization. Some internal parties who use accounting information include company owners, shareholders, employees, and managers. The following is an explanation of users of accounting information from internal parties: 1. Company owner The company owner or owner is the first internal party user of accounting information. Still according to Indrastuti Ristiyani, et al. company owners need to know accounting information to see the development of the company. Through accounting information, company owners can also monitor profits to determine further company policies. 2. Shareholders Just like company owners, shareholders are owners of capital and some of the assets of the company. They have the right to approve or reject company policies based on their own considerations. Accounting information can be used by shareholders to consider policies to be taken by the company. 3. Employees Employees also include internal parties who need accounting information. For employees, accounting information can provide an overview of the stability and profitability of the company. This relates to the fulfillment of employee rights, such as salaries, retirement benefits, employment opportunities, and other forms of security that they get from the company. 4. Manager Managers are internal parties who are given the responsibility to manage the company. Therefore, managers need a lot of information related to the company including accounting information. Accounting information is used by managers to carry out the function of managing the company in order to achieve the set targets. External Users of Accounting Information External parties are parties from outside the company but have an interest in the company. External parties who need company accounting information include creditors, potential investors, and the government. The following is an explanation of users of accounting information from external parties: 1. Creditors Creditors are parties who lend funds to the company. Creditors need to know the company's financial condition, one of which is through accounting information before extending credit. Through accounting information, creditors can find out the company's ability to pay its obligations and other risks that need to be considered. 2. 2. Prospective investors Prospective investors are parties who invest funds or other capital in the company. However, before investing in a company, potential investors must find out the condition of a company through accounting information. Prospective investors can use accounting information to assess the company's financial development, the company's ability to pay dividends, and the prospect of the company's value in the future. 3. Government The government is another external party that is also a user of accounting information of an organization or company. The government uses accounting information to determine the amount of tax that must be paid to the condition of the company related to employment. In addition, the company's accounting information can also be used by the government to compile national income statistics. 4. Suppliers Suppliers are also external parties that require accounting information before establishing cooperation with the company. Suppliers can use accounting information to assess potential and risks related to the company's ability to make payments for equipment or raw materials. 4. Customers Customers are external parties who utilize the company's goods or services. Customers have the right to know accounting information to find out the company's ability to supply their needs in the long term. Accounting information requirements 1. Accurate Accounting information must be accurate. This means that the information contains data that describes the actual condition of the company. 2. Relevant Accounting information must also be relevant. This means that the accounting information produced must be able to meet the needs of its users. 3. Complete The next accounting information requirement is complete. This means that accounting information must be made in full without hiding any data. 4. Timely The last accounting information requirement is timely. This means that accounting information must be available whenever the information is needed.