Users with an Indirect Financial Interest
Nowadays, various groups and organizations in the society like government agencies, regulators etc., have become the most important users of financial statement analysis information. They do not have any direct interest in the organization. They need financial information to make decisions on public issues. The most important users with an indirect financial interest are regulators and tax authorities.
Information Needs of Regulators
Regulators are the persons who have authority or can influence the rules guiding the preparation of financial statements. The regulators may be politicians and stock exchange authorities. Politicians need information for making legislations, for example, they may charge additional income tax levies on more profitable industries. Thus, politicians want industry-wise profit information and comparative analysis of profit statements. Stock exchange authorities' information needs are different from the needs of the politicians. Their main responsibility is to protect investors' interest. So they always try to make the companies more transparent in their operations. Thus, stock exchange authorities need the information relating to securities, profitability, operations and compliance information relating to existing laws and rules.
Information Needs of Tax authorities
Government gets most of the revenues from collection of taxes. Under central, state and local laws, individuals and organizations pay many kinds of taxes including income tax, excise tax and sales taxes. Tax authorities have the authority to assess and determine the tax liability of the business organization. The information needs of tax authorities are different from regulatory authorities. They want information relating to income statement only. The information relating to income statement may be production details or incomes and expenses. For example, sales tax authorities need only sales information and excise tax authorities need only production details and the income tax authorities need income statement details i.e., all incomes and expenses.
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