investors,state
It is everyone! But more so, people who would like to make an informed decision (In terms of purchasing shares). Hence through the use of financial statements, managed by accounting standards and external government bodies they can ascertain whether a company is making a loss/profit etc and whether they should invest in the company or not. In short to protect members and manage public interest.
External Users: are potential investors, banks, government agencies and other parties who are outside the business but need financial information about the business for a diverse number of reasons.
Accounting information is presented to internal users in the form of management accounts, budgets, forecasts andÊfinancial statements. External users are communicated accounting information in the form of financial statements. These users are creditors, tax authorities, investors, etc..
Generally bondholders would be external users of financial information. Prudent investors would most likely look over a company's external financial statements and disclosures before purchasing bonds from the company.
One user group for financial statements is external investors. They use the documents to determine whether the business is profitable. Internally, managers look at financial documents to determine whether their department is profitable.
external auditors focus primarily on controls that affect financial reporting. External auditors have a responsibility to report internal control weaknesses (as well as reportable conditions about internal control)
External Auditor has the role to materially evaluate the financial statements and provide his opinion that 'Does financial statements reflects true and fair activities of business' or not.
Unqualified audited financial statement is set of financial statements which are audited by external financial auditors and found "True and fair view" of financial statements and clear from any fraud etc.
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Internal information is the kind of information that is obtained internally such as accounts receivable information, financial statements etc. On the other hand external information is the type of information that is obtained from external means such as competitor business model, customer's credit rating etc.
its primary objective is to provide external reports called financial statements to help users analyze an organization's activities.
An audit report is a certification that financial statements are prepared according accepted accounting standards. In case auditors disagree with any issue and state their opinion of the issue in the audit report it is called qualified audit report.
An audit of historical financial statements is a form of attestation service in which the auditor issue a written report expressing an opinion about whether the financial statements are in material conformity with generally accepted accounting principles. When presenting information in the form of financial statements, the client makes various assertions about its financial condition and results of operations. External users who rely on those financial statements to make business decisions look the auditor's report as an indication of the statements' reliability. They value the auditor's assurance because of the auditor's independence from the client and knowledge of financial statement reporting matters. A review of historical financial statements is another type of attestation service performed by CPAs. Whereas audit provides a high level of assurance, a review service provides a moderate amount of assurance on the financial statements, and less evidence is necessary to support this level of assurance.
reports on new information; digital, electronic, and mechanical technology; reports on new scientific developments; micro and macroeconomic forecasts; and reports on present and proposed legislation