ACCA Applied Knowledge · Financial Accounting · Importance and purpose of analysis of financial statements
Which of the following users of financial statements is classed as an external user with a direct financial interest in the entity?
An equity investor is the external user with a direct financial interest, because shareholders sit outside the entity yet have money invested in it. The production manager, finance director and internal audit team are internal users with access to management information.
- AProduction manager
- BFinance director
- CInternal audit team
- DEquity investorCorrect
Explanation
Equity investors are outside the entity and have a direct financial interest through their investment. The production manager, finance director and internal audit team are internal users who can obtain information beyond the published financial statements.
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