State the role of accounting information, Financial Accounting

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State the role of Accounting information

Accounting information has a significant role to play in reporting the extent to which different groups have benefited from the business. Hence, owners may depend on accounting information to check whether the pay and benefits of managers are in line with agreed policy. A further illustration is the potential conflict of interest between owners and lenders. There is a risk that funds loaned to a business won't be used for purposes which have been agreed. Lenders may, consequently, rely on accounting information to check that funds have been applied in an appropriate manner and that terms of the loan agreement aren't being broken.

 


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