Proprietorships
These are business organizations that are owned by individuals who take full responsibility for their businesses. Since the owner has the overall responsibility of the organization, there may be no need for preparing a financial statement. They are, however, important in as sources of feedback about the financial status of the organization (Cascino et al., 2014). The owner is, therefore, the main user of the financial statements in a proprietorship.
Partnerships
Partnerships are business organizations that are owned by two or more individuals. Financial information users include lenders who use it to estimate the ability of the partnership to pay back the borrowed, the government to ensure that the partnerships pay taxes as required by the law (Faboyede, & Mukoro, 2012). Other users include investors who would want to know if their investment would generate income or not.
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Corporations
Corporations are separate legal entities which are owned by stockholders. The users may be either internal or external. Internal users are managers, supervisors, and directors of finance. They use the information in decision making and in deducing which products bring the most profit. The information also to orient the corporations strategically as per the goals (Luca, 2008). External users of financial information, on the other hand, include investors and creditors who use the information to determine the level of competitiveness of a corporation against other corporations. The Government in the place where the corporations operate also use the information to confirm if they abide by the law in paying taxes.
References
Cascino, S., Clatworthy, M., Garcia Osma, B., Gassen, J., Imam, S., & Jeanjean, T. (2014). Who uses financial reports, and for what purpose? Evidence from capital providers. Accounting in Europe , 11 (2), 185-209.
Faboyede, O. S., & Mukoro, D. O. (2012). Financial statement insurance: Restoring investor confidence in Nigerian banks. Research Journal of Finance and Accounting , 3 (4), 140-150.
Luca, M., (2008). Regarding the users of financial statements and their information needs. Studies and Scientific Researches. Economics Edition , (13), 49-55.
