Interested parties who need the

accounting information to make

decisions such as plans
organization and run the business.
 INFORMATION NEED :
Income/earnings for the period,
sales, available cash, production
cost

DECISION SUPPORTED:Analyze the

organization’s performance and position
and take appropriate measures to
improve the company results.Sufficiency
of cash to pay dividends to stockholder
 INFORMATION NEED : Profit for
the period, salaries paid to
employees.

DECISION SUPPORTED: job security,

consider staying in the employ of the
company or look for the other
employment opportunities
Accounting Information is
presented to internal users in a
form of :

Management accounts, budgets,

forecasts and financial statement.
This information will support what
ever the decision of internal users
Are individuals and organizations
outside the company who want
financial information about the
company. Directly involved in
managing and operating the
business.
Use accounting information to evaluate
the risks of granting or lending money.
Determining the credit worthiness of an
organization. Creditors include suppliers
as well as lenders of finance such as
bank.
 Use information to evaluate the risks of
granting credit or lending money.

Analyzing the feasibility of investing

in a company. Investors want to make
sure they can earn a reasonable return
on their investment before they commit
any financial resources to a company.
 Assessing the financial position of its
suppliers which is necessary for them to
maintain a stable source of supply in the
long term.
 Assessing the financial position of its
suppliers which is necessary for them to
maintain a stable source of supply in the
long term.
 Regulatory Agencies
SEC– Securities & Exchange Commision
DOLE – Department of labor & employment
Ensuring that a company’s disclosure of
accounting information is in accordance with
the rules set in order to protect the interest of
the stake holders who rely on such
information in forming their decisions.
 Regulatory Agencies

BIR – Bureau of Internal Revenue

SSS – Social Security System
LGUs -Local Government Units
 External users
Potential investors Suppliers
Banks BIR
DOLE

Information provided by accounting

1. Income or profit of the business
2. Resources or assets of the business
3. Liabilities or amount owed by the
business to its supplier.
4. Taxes paid by the business
5. Salaries and other benefits paid to
employees
Possible answers on the decisions of external
users that are supported by accounting
information
Potential Investors – Is it profitable for me
to invest in this business
Banks – If extend a loan to this company, will
be able to pay this loan? Does this company
have sufficient resources to pay its loan?
Suppliers – Do I extend credit to this
company? For how long?
BIR – Is the owner paying the correct taxes?
DOLE – Are the employees paid according to
what the law states? Do they get the benefits
required?
 GROUP ACTIVITY (Group
yourself into 2)
Act out internal and external
users of accounting
information

(10 mins preparation)

Each group should be able to present
the information needs of the different
users and relate these information to
their decision making process
INTERNAL USERS OF ACCOUNTING INFORMATION
ARE THOSE WHO ARE INVOLVED IN PLANNING,
ORGANIZING AND RUNNING THE BUSINESS. THEY
NEED MORE DETAILED INFORMATION ON A TIMELY
BASIS IN ORDER TO SUPPORT THEIR DECISIONS.
EXAMPLES: Managers, employees, owners

External users of accounting information are

those individuals or organizations outside a
company who are interested in its funancial
information.
Examples: potential investors,
suppliers, and government agencies.