Sun packaging is a profit-making manufacturing company established during 1998. The company is not fulfilling their responsibility towards their stakeholders. They do not provide fair wages to the employees and the company did not disclose all the financial information to their stakeholders about the company. Who are classified as stakeholders? 2.Discuss how each stakeholder will be affected? 3. Which principles or concepts of accounting is affected if they do not disclose the information?
Sun packaging is a profit-making manufacturing company established during 1998. The company is not fulfilling their responsibility towards their stakeholders. They do not provide fair wages to the employees and the company did not disclose all the financial information to their stakeholders about the company.
- Who are classified as stakeholders?
2.Discuss how each stakeholder will be affected?
3. Which principles or concepts of accounting is affected if they do not disclose the information?
Answer 1: Stakeholders are the owner's of the company which is represented by the number of equity shares held by the respective owners. Stakeholders include owners, creditors, suppliers regulators etc. Managers of the company are directly responsible towards customers, creditors, regulators and indirectly towards owners so that business can be run successfully and profitable with transparency. The said company is violating the rules if they are not performing their responsibility towards its stakeholders and not paying the due wages to the employees.
The stakeholders and management of the company are two different things. Management is chosen by the stakeholders to run the day to day operations of the company. It is the management who decides what to do or not with the required disclosures from stakeholders.
Answer 2: Following are the various stakeholders being affected:
a) Internal stakeholders: Internal stakeholders are the employees, owners and managers. In the absence of required information the internal stakeholders are negatively impacted. The internal stakeholders should be informed about the various short term ans long term strategies of the company so that they can achieve the objectives of the organisation as whole.
b) Owners: Owners are the people who invest the money in the company in return of the dividend and long term profits. Owners are also indirectly impacted if the adequate information is not disclosed. Owners are directly affected by the result of the company.
c) External stakeholders: There are external stakeholders who are directly affected by the results of the operations. External stakeholders like creditors, regulators are interested on the amounts being owed to them by the company.
d) Local and global societies are also directly and indirectly impacted by the actions of the companies.
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