Employees need these reports in making collective bargaining agreements with the management, in the case of labor unions or for individuals in discussing their compensation, promotion, and rankings. Prospective investors make use of financial statements to assess the viability of investing in a business. Financial analyses are used by investors and prepared by professionals (financial analysts), thus providing them with the basis for making investment decisions.
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[quote]Vendors who extend credit to a business require financial statements to assess the creditworthiness of the business.[/quote]
Government also produces financial reports to stay accountable to the public and people. The rules for recording, measurement and presentation of government financial statements may be different from those required for business and even for non-profit organizations. The requirements for non-profit financial statements differ from those of a for profit institution and therefore, will not be discussed.
Categories: Accounting, Administration
