Investors and Shareholders

External stakeholders, such as investors and shareholders, depend on accounting information to evaluate an organization's financial stability and potential for returns on investment. Accurate financial reporting is essential for building and maintaining investor trust.

Needs: Investors and shareholders seek transparency and reliable financial information to evaluate the financial health of the organization and make investment decisions.

How Accounting Meets Needs: Accounting ensures accurate and standardized financial reporting, including annual reports and financial statements, helping investors and shareholders assess an organization's profitability, solvency, and growth potential.

Advantages: Investors and shareholders use accounting information to assess the financial performance and value of a company. It informs their investment decisions and provides insights into a company's financial stability.
Disadvantages: Accounting information may not always reflect the true value of intangible assets like brand value and innovation.