F U N A C C O
DEFINITION AND NATURE OF ACCOUNTING
Accounting - its function is to provide quantitative information, primarily financial in nature, about economic entities that is intended to be useful in making economic decisions.
Stakeholders - all parties who have interest in an entity, whether indirect or direct.
Stakeholders are grouped into two, namely:
External Users - groups or individuals who are not directly concerned with the day-to-day operations of the entity.
They make decisions that affect their relationship to the entity.
Internal Users - management personnel in all levels within an entity who are responsible for the planning and control of the operations and therefore, they have access to the day-to-day operations of the entity.
Some of the users of financial information:
Investors - concerned with the risk inherit in, and return provided by, their investments.
- need information to help them determine whether they should make additional, hold or sell their investments.
Lenders - interested in information that enable them to determine whether their loans, and the interest attaching to them, will be paid when due.
Suppliers and other Trade Creditors - interested in information that enable them to determine whether amount owing to them will be paid when due.
Employees - interested in the information about the stability and profitability of their employers.
- interested in the information that will enable them to assess the ability of their employers to provide remuneration, retirement benefits and employment opportunities.
Customers - interested in the information about the continuance of an entity, especially when they have a long-term involvement with, or are dependent on, the entity.
Governments and their Agencies - interest in the allocation of resources and, therefore, the activities of entities.
Public - interested in information about the trends and recent developments...