In my opinion, both theories have a lot in common and they cannot be divided. According to Hawke both theories “used to justify differing views on: whistle- blowing, tax avoidance, risk to auditor independence, deception and exploitation in business transactions”. (Hawke, 2010) Both theories have the same practical implementations and the same consequences, which mean that if stakeholder theory is true, then shareholders theory is trues. In the modern corporation, the manager is the person who has the right to use company’s resources in order to meet not only stockholder wished but also to cover the needs of all employees, suppliers and society. In case something goes wrong, the stockholders can sue the manager for not doing what he/she is supposed to.
An external auditor is from an independent firm which is hired by shareholder vote. The external auditors provide full evaluation, using specific formats for their audit, to investors, creditors and to participants who are somewhat connected to the specific business. Auditor has evaluated company’s financial situation and if the whole dates would be accurate it gives more benefit for owner of the company. The reason is that financial statement is more reliable when it checking by the external auditors and when it is absolutely
Introduction Business Ethics are much more than the buzz word stories on late night news. The Corporate Social Responsibility of a company goes well beyond that. “Business Ethics are moral guidelines for the conduct of business based on notions of what is right, wrong and fair.” (Bellow, 2012). Individual backgrounds play a huge role in person by person code of conduct can vary from employee to employer. To help solve some grey areas in what is ethically correct, companies now make a code of conduct that is over everyone in the company.
You also believe that the corporation as “self” has a right to self interest as long as it is within the confines of the law. Finally, you acknowledge that tax avoidance strategies are at present widely considered to be smart business decisions and are overwhelmingly supported by individuals and corporations alike. In the case of extreme examples (such as Apple’s and G.E.’s), it could also easily be construed and perceived as corporate greed. Z-Corp’s management realizes, however, that “in business, not only are we faced with questions between right and wrong, but between right and right. We have all experienced situations in which our professional responsibilities unexpectedly come into conflict with our deepest values...we are caught in a conflict between right and right.
Use of the accounting in business, gives a clear review of net income, helps to plan budget of the business accordingly. Procedures Accounting in business, follows a particular process either in small scale business or large scale businesses with step by step process. Here is the straight forward procedure of accounting to know the organization current situation. Accounting cycle is followed for each and every analyses of the business transactions. SUB – TOPICS Management Accountant In Management, the accountant gives advices to the individuals and business people, how to manage their business.
Corporate directors have an important job of representing interests of stakeholders ranging from profit maximization in interest of shareholders, to a broader set of stakeholder interests such as creditors, employees and customers. These are governance systems with competing interests because you cannot focus on profit maximization for shareholders whilst keeping in mind stakeholders needs for employment and stability. The answer perhaps is found in “enlightened shareholder value” approach that provides a more comprehensive analysis on the issue by compromising interests of both parties. The shareholder theory states that directors have delegation for decision making authority to manage the company with the exclusive purpose of maximizing shareholders return on investments. “In the traditional view of the firm, the shareholder view, the shareholders are the owners of the company, and the firm has a binding fiduciary duty to put their needs first, to increase value for them.” (Miles, 2011) Therefore, actin in company’s interests is to conduct the business in the way that promotes shareholder interest and value.
An agent must follow and obey instructions given by their principal and would be held responsible for the losses resulting from him/her disobedience and maybe charged for disobedience. An instruction clearly given by the principal to an agent cannot thereby enlarge the agent duty exceeding those that has been promised to be given, thus the agent cannot disobey reasonable orders given to them by their principal. Regarding the case, it is clearly shown that Maya has failed to follow simple instructions given by Kallesi. In this matter, the case Gilmour v Clark (1853), Gilmour gave specific instructions to Clark, a carrier, to Carry the goods to the docks and settle them on a ship, named “Earl of Zetland”.Clark willingly put the goods on another cargo ship called “The Magnet” instead. But some unfortunate accidents happen and in the end she ship sank and all the goods was lost.
Additionally, finding opportunities that bring a plus to the firm make the different between an excellent financial manager to an inefficient financial manager; It is no more than identify occasion which could add in investment to benefit the company. A business can use opportunities if the organization is efficient finding opportunities and pay for the desired acquisitions (Brian, n.d.). Finally, risks are unavoidable in business, but it most is carefully taking. That 's way financial manager try to reduce risk and take preventions; They should bring a ensures for building, equipment and essential workers. Controlling debt and credit arrangement with suppliers and financial institutions helps to reduce risks by allowing the firm operated freely in case that the business experiences cash flow problems(Brian,
(Elliot B and Elliot J, 2011, p.16) Shareholders are interested in dividends and profits. As they invest their own money in to the business they are really interested in how the business is running and how well it is doing. They are the owners of the business and they need to get information from those that manage the business on their behalf. They don’t have access to the same amount of detailed information as the managers do. The financial reports that are given to the shareholders are also used by other users such as lenders and trade creditors.
In a much broader sense, the owners of a corporation can be further divided into shareholders and board members. A shareholder is defined as an individual, company or institution that holds a share in the company. Shareholders can, hence, be regarded as the owners of the company and, therefore, have several legal rights. Shareholders are important providers of the company’s capital and, therefore, have a significant amount of influence in the management of the company. According to Friedman, a corporate executive 's responsibility to his owners includes carrying out business operations that fulfil the owners ' or shareholders ' desires of maximizing profits in accordance with the legal and ethical rules followed by society.