Which of the following would be classified as external users of financial statements?
A)Creditors of the organization and the Internal Revenue Service
B)Stockholders and the CFO of the organization
C)Management of the organization and the audit firm
D)Management of the organization and SEC
E)Stockholders and middle managers of the organization

Question

Quizplus · Accepted Answer

External users are those who are not directly involved in the operations of the organization but need financial information to make decisions. Creditors and the Internal Revenue Service are examples of external users as they rely on financial statements to determine the creditworthiness and tax liability of the organization. Stockholders (option B and E) and management (option C and D) may be internal users as they are directly involved in the organization's operations. The CFO (option B) may be both an internal and external user depending on the situation.

Which of the Following Would Be Classified as External Users