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INTRODUCTION
In 1975 the Corporate Report was published, this was the outcome from the Accounting
Standards Steering Committee wide ranging discussion paper and in part considered the
usefulness of financial statements
(Dunn, April 2002) discusses that to meet their basic objective financial statements must
be useful; and the information relevant and reliable. Information will have relevance if it
influences the decisions of the users. Relevance and reliability are primary characteristics
relating to content together with the threshold quality,materiality. The primary
characteristics relating to presentation include comparability, clarity and understandability.
The Corporate Report in 1975 identified the major user groups listed below
Equity Investors
Lenders
Employees
The Analyst Advisor Group (financial analysts, journalists, economist statisticians,
researchers, trade unions, credit rating agencies and stockbrokers)
The Business Contact Group (suppliers, customers & competitors)
Government
Public
The Users Of Financial Statements
Equity Investors can be
Existing investors
Potential Investors
Both existing & potential investors can be long-term or short-term investors with a sole
purpose of increasing their wealth by way of capital gains (Via trading of shares/securities)
or by earning dividends
Lender/Creditors often referred to as the loan creditor group are people who supply funds
to the company either on a
Short term basis
Medium term OR
Long term Basis.
On short term basis the loan can be overdraft facility for a company but long term basis
include heavy loans secured for future expansion or capital expenditures. The loan creditor
group normally includes banks & discount houses which usually provides overdraft and
other flexible fund management facilities to corporations, provided they have a sound
financial performance backing.
Employees This group is considered to be the least affected of all when it comes to
analyzing the companys accounts but they are the first to get a feel of an impact of
changing circumstances in form of promotions, demotions or lay-offs.
The Analyst Advisor Group This group includes financial analysts, journalists, economist
statisticians, researchers, trade unions, credit rating agencies and stockbrokers
The Business Contact Group
It consists of
Suppliers
Competitors
Customers
Suppliers This group comprises the trade creditors who are Suppliers of products and
services to the company. They provide goods or services on credit terms to the company.
Competitors can be
Existing OR
Potential (New Entrants)
This group is comprised of rivals or operators other than the company in the industry
offering similar products or services offered by the company.
Customers They refer to the end-user of goods or services produced by the company.
Government This group consists of regulators which deals or monitors that whether the
company has met or fulfilled the statutory requirements as prescribed by law or not and to
