Who is considered an internal user of financial statements?
Internal users will use financial statements to make decisions that might affect the operations of the business. Internal users includes management of the company, the board of directors, or company employees. This could also include private equity firms, venture capital firms, or the parent if the company is a subsidiary.
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Who is considered an external user of financial statements?
External users of the financial statements will use information reported in the financial statements to determine whether engaging in business with the company would be beneficial. Internal users would use the financial statements to make decisions that impact the operations of the business. External users of the financial statements will include: 1) Regulatory agencies: Regulatory […]
Who are the primary users of financial statements?
Primary users of the financial statements are considered existing and potential investors, creditors, and lenders. Primary users obtain financial statement information and allow them to understand the overall health of the company such as its net cash flow status etc. Such users make decisions related to purchasing or selling interest in these reporting entities. Other […]
Who has a direct interest in financial statements and who has an indirect interest in financial statements?
Users with a direct interest will generally have an economic interest in the specific entity, while users with indirect interests may not. The visual below summarizes who is typically considered a direct and indirect user of financial statements.