Describe the informational needs of external users.

Following are the informational needs of external users:

• Owners or Investors – They are the persons who have invested or want to invest money in the business. They are interested in knowing the profitability, financial position of business and future prospects.
• Suppliers or other Creditors – They advance money or goods to the business. They are interested in knowing the profitability and financial position of business to judge its paying capacity.
• Employees – They need accounting information to claim increase in wages, bonus and other benefits.
• Consumers – They need accounting information to create public opinion against those business firms who exploit the consumers.
• Government and their agencies – To collect various taxes such as sales tax, income tax, excise duty etc. they are interested in accounting information.
• Researchers – Researchers need accounting information to study financial operations of business for the purpose of developing accounting theory and business practices.
• Social Responsibility groups – These groups are mainly concerned with environment protection and contribution of business to society for betterment.