Accounting is an information system that identifies, records, and communicates the economic events of an organization to interested users. The major users and uses of accounting are as follows.

(a) Management uses accounting information to plan, organize, and run the business.

(b) Investors (owners) decide whether to buy, hold, or sell their financial interests on the basis of accounting data.

(c) Creditors (suppliers and bankers) evaluate the risks of granting credit or lending money on the basis of accounting information. Other groups that use accounting information are taxing authorities, regulatory agencies, customers, and labor unions.