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In some instances we have been unable to trace the owners of copyright material and we would appreciate any information that would enable us to do so. qxd 7/08/2007 11:20 CHAPTER Page 1 1 Introduction to accounting and finance Introduction n this opening chapter we begin by considering the roles of accounting and finance. We shall see that both can be valuable tools for decision-making purposes. We shall identify the main users of accounting and financial information and discuss the ways in which this information can improve the quality of decisions that those users make.

Whether to continue in employment with PI and, if so, whether to demand higher rewards for their labour. The future plans, profits and financial strength of the business are likely to be of particular interest when making these decisions. Whether PI should pay tax and, if so, how much, whether it complies with agreed pricing policies, whether financial support is needed and so on. In making these decisions an assessment of its profits, sales revenues and financial strength would be made. Whether to allow PI to expand its premises and/or whether to provide economic support for the business.

1). The difference in their targeted users has led to each strand of accounting developing along different lines. The main areas of difference are as follows. ● ● ● ● ● ● Nature of the reports produced. Financial accounting reports tend to be general purpose, that is, they contain financial information that will be useful for a broad range of users and decisions rather than being specifically designed for the needs of a particular group or set of decisions. Management accounting reports, on the other hand, are often specific-purpose reports.

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