The information needs of other groups
We have dealt so far with the information needs of four major groups which have vested interests in business organizations, and we have discussed the nature of their information requirements. How far and how adequately their information needs are suitably satisfied depends largely upon the pressure which these groups may exert upon the accountant to produce information tailored to these needs. How well they are able to articulate their information needs, how well accountants are able to understand the reasons why the information is needed and how willing and able accountants are to provide that information will be the theme of much of this book. We may say, for example, that the information needs of management are more adequately met than those of employees, shareholders, creditors and also governments. But there are two further groups in society who are interested in the activities of business organizations, and who are pretty well excluded from receiving information: the local community and customers.
(a) The information needs of the local community
Local communities are very dependent on local industries, not only because they provide employment, but also because they affect directly the entire socio-economic structure of the environment. Firms provide employment, they create a demand for local services, they cause an expansion in commercial activities, as well as extensions in the provision of welfare services as the economic well-being of the community improves. Large firms, in particular, are able to exert a dominating influence on the local social framework which often is reflected in the corporate personality of the inhabitants. Miners, steelworkers, shipbuilders and workers in the motor industry do have styles of living and attitudes forged to some extent by the industries in which they work and live.
Local industries have positive and negative influences on the locality. Pollution. despoliation, congestion are all negative aspects of their activities which constitute external direct and indirect social and economic costs, which are borne by the community.
The local community has an interest in the activities of local industries, and evidently requires much more information of social benefits and costs than the public relations-type information which is presently disclosed. The social audit points to a possible remedy for the lack of objectivity in the information presently disclosed.
(b) The information needs of customers
Of recent years, Consumers Councils and other bodies have been formed in order to restore in some measure the disproportionate balance of power which has appeared in our society between the large and powerful producers of consumer goods and the voiceless masses of our population who, subjected to subliminal advertising, monopoly practices, and suffering from ignorance, have been at the former's mercy. In a few instances, the Monopolies Commission have acted to protect consumers, but their power to intervene is based upon law.
Customers may well have little influence in markets increasingly dominated by large business organizations, and it is difficult at this stage to see how, even if more information were made available, the balance might be redressed. Certainly, one may suggest that customers are interested in information indicating the fairness of pricing policies, such as the relative proportion of unit price which consists of costs, profits and taxes, as well as the differential costs between one product and another product produced by the same firm at a different price. For example, why should one electric shaver cost £10 more than another, and in what ways is this difference value for money? Clearly, there will be many more social changes in our society before questions of this sort will he loudly heard and answers demanded.
The information needs of creditors
We may define as creditors all those who have provided goods, money or services to business organizations and have accepted a delay in payment or repayment. Creditors may be short-term or long-term lenders. Short-term creditors include suppliers of materials and goods, normally described as trade creditors, credit institutions such as bankers and hire-purchase firms who lend money for interest on a relatively short-term basis, and those who have provided services and are awaiting payment, for example, employees, outside contractors who have made repairs,... see: The Information Needs of Creditors