Parties Interested In Financial Statements

• Shareholders: Since shareholders have invested in the company so they are interested in the financial statements.
• Creditors: Creditors may be short-term or long-term. The main concern of the creditors is focused on the credit worthiness of the firm and its ability to meet its financial obligations. They are therefore concerned with the liquidity of the firm, its profitability and financial soundness.
• Management: Management requires accounting information for planning, organizing, and control purposes. The emphasis on efficient & effective management of organizations has considerably extended the demand for accounting information.
• Employees: The importance of harmonious industrial relations between management & employees cannot be over-emphasized. The employees have a stake in the outcomes of several managerial decisions. Greater emphasis on industrial democracy through employee participation in management decisions has important implication for the supply information to employees. Matters like settlement of wages, bonus, & profit sharing rest on adequate disclosure of relevant facts.
• Government: Government uses financial information for compiling statistics concerning calculation of profitability, taxes, computation of national income, and determination of the industrial growth.
• Stock Exchanges: Several stock exchanges also require accounting information for listing of securities.
• Consumers & Others: Consumer organizations, media, welfare organizations and public at large are also interested in condensed accounting information in order to appraise the efficiency and social role of the enterprises in different sectors of the economy.

Q. Why Stakeholders Might Be Interested in the Financial Statements of an Organization?