You need to read the following as background information to inform your study. This section is not Management Accounting as such, but will give you a context for it's study. Information can be distinguished from data in that the latter can be looked upon as facts and figures which do not add to the ability to solve a problem or make a decision, whilst the former adds to knowledge. If, for instance, a memo appears on a manager's desk with the figure "10,000" written on it, this is most certainly data but it is hardly information. Information has to be more specific. If the memo had said "sales increased this month by 10,000 units" then this is information as it adds to the manager's knowledge. The way in which data or information is provided is also affected by the Management Information System (MIS) which is in use. Taking our example in a slightly different context, the figure of 10,000 may be input to the system as an item of data which, at some stage, will be converted and detailed in a report giving the information that sales have increased by
10,000 units.
Users of Information
Users of information and the uses to which that information can be applied are as follows:
1. Managers – to help in decision making.
2. Shareholders and investors – to analyse the past and potential performance of an enterprise and to assess the likely return on investments.
3. Employees – to assess the likely wage rate and the possibility of redundancy and to look at promotion prospects.
4. Creditors – to assess whether the enterprise can meet its obligations.
5. Government – the Office for National Statistics collects a range of accounting information to help government in its formulation of policy.
6. HM Revenue and Customs – to assess taxation.
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