External users of Accounting Information
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External users of Accounting Information
The external users of accounting information are outside the business and not directly involved but they have a range of interests and curiosities in the business itself. One external user of accounting information is investors. The reason for investors using the accounting information is to determine whether to invest or keep money in the business. Another external user of accounting information is the banks. The reason that they are interested in using the accounting information is to assess the ability of the business to pay back a loan. Another external user of accounting information is trade payables. The reason for trade payables using the accounting information is to evaluate whether the business should be offered goods or services on credit. Tax authorities are another external user of accounting information. The reason that they will use the accounting information is to check if the business has paid the right amount of tax. Another external user of accounting information is competitors. The reason for competitors using the information is out of curiosity to see the performance of their business and compare themselves against others in a similar business. Auditors are another external user of accounting information. The reason that they will use the information is to form an opinion on the financial statements.
