Explain the needs of internal users for management accounting information (section 1.2).

1.2 Meeting the needs of internal users
Although the definition of accounting remains appropriate for internal reporting purposes, its application will be different because internal users need to form judgements and make decisions that are different from those of external users. External users form judgements on the overall performance of the entity and make decisions about their relationship with it. Their decisions are of the type: 'Shall I invest money in this business?', 'Shall I continue to be an investor in this business?', 'Shall I supply goods to this business?', 'Shall I continue to supply goods to this business?', 'Shall I become a customer of this business?', 'Shall I continue to be a customer of this business?' The internal users make different types of judgement and different types of decision.
They may have to judge the performance of the various products of the organisation as compared with those of competitors. They may have to judge the performance of different divisions within the organisation. Their decisions are of the type: 'Shall I invest in manufacturing more soap powder, or do I switch resources into toothpaste?', 'Shall I continue offering a television repair service as support for my sales of televisions?', 'Is it cost effective to have three separate locations at which my tenants can pay their rent?', 'Will this investment in a new factory pay for itself over the next 10 years?' There is great variety in the judgements and decisions made by those who manage the business. Their needs are so wide ranging that management accounting has developed as a separate discipline, within the overall 'accounting' umbrella, in order to serve the particular needs of management.