Exercise 2:

Match the financial statement users and other parties involved in the use of and preparation of financial information with their role.

Financial Statement Users and Other Parties

Equity Investors

Creditors

Financial Analysts

Employees and Labor Unions

Suppliers and Customers

Government Agencies

Competitors

External Auditors

Internal Auditors

Regulatory Bodies

Professional Organizations

Role :

1. Are banks and other financial institutions that lend money to the company.

2. Use financial statements to determine whether to conduct business or purchase products from a company.

3. Use financial information to determine their market position relative to the reporting entity and to attempt to identify future strategies of the reporting entity.

4. Are independent of the company and responsible for ensuring that management prepares and issues financial statements that comply with accounting standards and fairly present the financial position and economic performance of the company.

5. Use financial information to review and analyze reported results of the companies they cover and make investment recommendations.

6. Are employees of the company serving in an advisory role to management. They provide information to management regarding the companys operations

and proper functioning of its internal controls.

7. Review the financial statements of publicly traded companies for a variety of reasons that are in the public interest.

8. Use financial information during negotiation of new labor agreements and compensation contracts.

9. Support accounting professionals throughout their careers by providing training, professional skills development, and other resources.

10. Are shareholders of the company.

11. Protect investors and oversee the accounting and auditing standard setting processes.