Which of the following is an external user of accounting information?

• A. Cost Accountant
• B. Investor
• C. Company Manager
• D. Internal Auditor

Answer: (B)

Verified step by step guidance

1. Understand the distinction between internal and external users of accounting information. Internal users are individuals within the organization who use accounting data to make decisions, such as managers, cost accountants, and internal auditors. External users are individuals or entities outside the organization who rely on accounting information to make decisions, such as investors, creditors, and regulatory agencies.
2. Review the roles of the options provided: Cost Accountant, Company Manager, and Internal Auditor. These roles are typically internal users because they are directly involved in the operations and decision-making processes within the company.
3. Consider the role of an Investor. Investors are external users because they are not part of the organization but rely on financial statements to assess the company's performance and make investment decisions.
4. Identify the correct answer based on the classification of users. Since the question asks for an external user, the correct answer is 'Investor.'
5. Conclude that understanding the distinction between internal and external users is crucial for interpreting accounting information and its intended audience.