USERS OF COST AND MANAGEMENT ACCOUNTING (EXTERNAL USERS)

USERS OF COST AND MANAGEMENT ACCOUNTING

External Users

External users, which use the cost and management accounting information may include the followings:

(a) Regulatory Authorities- Regulatory Authorities are concerned with cost accounting data and information for different purpose which includes tariff determination, providing subsidies, rate fixation etc. To do this the regulatory bodies require information on the basis of some standards and format in this regard.

(b) Auditors- The auditors while conducting audit of financial accounts or for some other special purpose audit like cost audit etc., requires information related with costing and reports reviewed by management etc.

(c) Shareholders- Shareholders are concerned with information that effect their investment in the entity. Management communicate the shareholders through periodic communique, annual reports etc. regarding new orders received, product expansion, market share for products etc.

(d) Creditors and Lenders- Creditor and lenders are concerned with data and information which affects an entity’s ability to serve lenders or creditors. For example, any financial institutions which provides loan to an entity against book debts and stocks are more concerned with regular reporting on net debt position and stock balances.