Which of the following is not an intermal user?
Select one
A staff employees
B. stockholders
C. department manager
D. corporate officers
The correct answer and explanation is :
The correct answer is B. Stockholders.
Explanation:
In any organization, internal users are those individuals or groups who are directly involved in the operations of the business and use internal financial and non-financial information to make decisions related to their roles within the organization. These users typically have a direct relationship with the day-to-day activities of the business.
Let’s break down each option:
- A. Staff Employees:
Staff employees are considered internal users because they are involved in the operations of the company. They may require information regarding budgets, performance, and costs to help them in their roles, such as in payroll, budgeting, or cost control. They are directly affected by internal policies and procedures, making them internal users. - B. Stockholders:
Stockholders, or shareholders, are not considered internal users. They are external users of the company’s financial information. Stockholders own shares in the company, and their primary interest is in understanding the company’s financial performance to assess whether they should buy, hold, or sell their shares. While they may use financial statements to make investment decisions, they do not participate in the day-to-day operations of the company, thus classifying them as external users. - C. Department Manager:
Department managers are internal users because they manage specific functions within the organization. They require financial data to make decisions regarding budgets, resource allocation, performance evaluation, and to assess the effectiveness of their department’s operations. They play an active role in managing and controlling internal processes. - D. Corporate Officers:
Corporate officers, such as the CEO, CFO, and other executive roles, are internal users because they make strategic decisions that affect the company as a whole. They have access to detailed financial and operational information to guide the company towards its goals. Their decisions are integral to the company’s internal workings.
In conclusion, stockholders are the only group in the list that is not considered an internal user, as they do not have an active role in the daily operations or management of the company. They are external users who primarily rely on public financial statements to make investment decisions.