These Users Of Accounting Information Are Not Directly Involved With The Business Enterprise

The correct answer is b. External Users, as these types of users are outsiders for the company’s business which are not directly and internally see the business enterprise. They are outside stakeholders who are interested in the financial performance and financial reports of the business. These Users Of Accounting Information Or Users of Financial Statements include investors (shareholders / stockholders), lenders or creditors or suppliers, customers, financial institutions (such as banks, investment companies, etc.), government, professionals (such as law firms), regulatory authorities and others. An investor is interested in the Profitability, liquidity and return on their investment. All of these information can be obtained from the financial reports and analysis of financial reports of the business enterprise.

On the other hand, internal users are directly and internally involved in the day-to day business activities. They are more capable to operate, manage and grow the business during the accounting cycle. These users include, owners, board of directors (top management) management and employees. The finance manager can control the business activities through internal control management system to improve financial performance and run the business efficiently and effectively. Financial health of the business is checked through the analysis of financial reports. Employees are looking for salary packages, salary allowances, commission, incentives, bonuses, job security, etc. For this, they can read financial reports to check the financial performance and financial strength of the business.