There are several groups of people within a business that use its accounting information, each having different needs and objectives. These groups of users are noted below.

Management

The core internal users are the managers. They need detailed performance information about each segment of the business, so that they can make ongoing corrections and enhancements to the organization. Their objectives are to maintain a steady or increasing level of cash flow, while also maintaining a prudent level of debt risk. They may also need this information to make decisions about acquisitions or divestitures.

Board of Directors

Board members use accounting information to evaluate an organization’s performance, approve budgets, and make informed governance decisions. The board’s main role is to oversee the decisions of the management team, which requires quantitative information that can only be obtained from accounting reports.

Owners

Investors use accounting information to determine their return on investment, based on the reported cash flows being generated by the business. Depending on the outcome, investors may alter their level of investment in the business, either selling from their current positions or acquiring additional shares from others.

Internal Auditors

Internal auditors use accounting information to spot problems in the financial results and financial position of a business. Accounting information can reveal such matters as potential fraud issues and asset losses, which internal auditors can explore further by conducting a variety of audit investigations. They then take their findings to the organization’s audit committee, which decides what to do with this information.

Employees

If employees have access to accounting information (which is not always the case), they can use it to estimate the ability of the firm to pay them an adequate level of compensation, as well as to fund any pension plan that the organization offers them. This can result in decisions to remain with the firm or seek employment elsewhere.

Unions

Unions can use a firm’s accounting information to determine its level of profitability and debt load. This information is useful for deciding how hard to push for a wage and benefits increase in the next contract negotiations. If the company is reporting marginal results, then the union might be inclined to push less hard, and vice versa.