Internal Users Of Accounting Information Include A Company's Stockholders. True Or False?
Important Example Of External User Of Accounting Information
This statement is “false”, as stockholders or shareholders are not
participating in the decision-making process eventhough they become the owners
of the corporation / company by buying stocks / shares, especially, in case of
large and popular company, as they spread around the world, so they can’t make
decision and control day-to day business’ operations. However, top management
i.e., board of directors are internal users of company and they manage and
control the business activities on the behalf of the owners of the company’s
business. They are in a good position to manage the business operations and are
held responsible for the performance and financial health of the company’s
business. They define overall objectives & goals, set directions and make
strategic planning to achieve those objectives and goals set in the strategic
planning i.e., making vision, mission and objectives and goals for the company
at corporate level which is to be followed at functional and bottom level
management. They protect the interests of the shareholders of the business.
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