2.2.1 Who are the Stakeholders (Harner, 2016) Stakeholder is any person, group or entity has a stake interest in the company or firm. Moreover, stakeholders can be classified into two groups according to the effort on question. These two groups are known as: Primary stakeholders who are directly affected either positively or negatively by an effort. However, secondary stakeholders are those who are indirectly affected by an effort. 2.2.2 Stakeholder satisfaction (Vanagas, P, Susniene, D, 2007) the authors argued that satisfying the stakeholders improve the company’s’ goodwill. The authors focused on the satisfaction of the stakeholders and underlined their interest. Moreover, the stakeholders can be internal or external and the stakeholder’s …show more content…
J., & Shen, Z. (2014) this study discussed the fraudulent financial statement (FFS) which become a serious case with each passing day. The purpose of this study is to expect the best method to forecast the fraudulent financial statement and to reduce the damages that may happened to the investors and auditors. Fraudulent financial statement is defined and known as the illegal behavior which provide mislead financial statement for the users. The findings of this study were that using the financial and nonfinancial information effectively to differentiate the fraudulent financial statement. This study meets and matches the theme of Auditing the financial statement because, because it is the main basis of decision making and any material misstatement may affect the economic decision of the investors and users in general. To sum up, auditing the financial statement is very essential for the users to make their economic decisions. The auditor independence, fee and tenure has positive impact on the quality of auditing. Moreover, the auditor must maintain his independence and don’t take a side of any party. In addition, FFS which is illegal behavior and wrongful accounting information provided by the firms, which mislead the users. In addition, the financial statement fraud cost the users billions of dollars. So, the need and importance of auditing the financial statement increase day by
The two primary stakeholders are the company’s customers and employees/suppliers who are directly involving in the company’s business. The two secondary stakeholders who do not engage directly with the business are the general public and environmental activist groups.
People organization or groups that have a direct or indirect interest in a one particular organization or surrounding are called stakeholders.
A stakeholder is anyone whether involved or not involved that is interested in an outcome to a situation (Editorial Board, 2015).
Stakeholder is anyone with an interest in a business; stakeholders are individual, groups or businesses. They are affected by the activity of the business. There are two types on stakeholders who are internal and external. Internal stakeholder involves employees, managers/directors and shareholders/owners. External stakeholder involves suppliers, customers, government, trade unions, pressure groups and local and national communities.
Madura, Jeff. What Every Investor Needs to Know About Accounting Fraud. New York: McGraw-Hill, 2004. 1-156
Hence, the stakeholders which are described as those who are affected by the organisation performance ,actions and duties and those actions includes employees, clients, local community and investors as well. The theory of stakeholders also suggests that it is the responsibility of firm to make sure no rights of stakeholders are dishonoured and make decisions in the interest of stakeholders which is also the purpose of stakeholder theory to make more profit and balancing it while considering its stakeholders (Freeman 2008 pp. 162-165). In the other words organisation must also operates in a more socially accountable approach by carrying out corporate social responsibility as (CSR) activities.
Regarding to organizational stakeholders, there are three main groups of stakeholders: customers, employees and investors. The company attempts to link stakeholders’ needs and expectations to the company’s goals. For customers, the company must treat them fairly and honestly. For employees, the company needs to treat them fairly, make them a part of the company and respect their needs. For investor, managers should comply with the accounting procedure, do not manip...
But the stakeholders play a very important role in preventing and deterring fraud. Stakeholders includes customers, suppliers, employees, the community and the government. Each play an important role since they have an interest in the integrity of financial reports of the publicly-traded company. Employees have a vested interest in the company’s success and they have a responsibility to protect their interest. Their roles may start from the bottom but they are key players in the company. To help deter or prevent financial statement fraud, the employee must report financial reporting fraud if it is detected. This can be done by way of a vigorous whistleblower program of some other tip line provided by the company. The community and its members, including the news media, can play a regulator role by confirming that the company is a good citizen with fair business practices. Shareholders should make sure that any company in which they’d like to invest is in compliance with standards of oversight and ethics. Investors need to play and active role also. They should be actively involved by monitoring the companies in which they invest. They should attend shareholder’s meeting regularly to discuss concerns and check the books of the company. This will allow them to stay current with what is going on within the company. Shareholders should always remain vigilant and make
In a more recent study, Carroll and Shabana (2010) conducted research that examined the negative effects of poor interactions between stakeholders and companies. The findings show that companies that had poor interactions with their stakeholders were not effective in reducing cost and risk, they were perceived as not being legitimate companies, the company’s reputation was negatively impacted, there were no company competitive advantages that existed, and no synergistic relationships were observed (Carroll & Shabana, 2010). In this study, we can see how the poor stakeholder interactions with their companies can hinder a company in many ways. This study is important to understanding the problems that stem from having multiple stakeholder definitions; first, stakeholders cannot be identified, second, stakeholder expectations and requirements go unidentified, third, because stakeholders are not identified company interactions with stakeholders is
Stakeholders’ analysis is the analysis which tells that how the company is dealing with the people which are directly or indirectly related with the company’s operations. These are called stakeholder and they include the employee, society, suppliers, buyers, shareholders, got and other tax related companies.
Stakeholders are those groups or individual in society that have a direct interest in the performance and activities of business. The main stakeholders are employees, shareholders, customers, suppliers, financiers and the local community. Stakeholders may not hold any formal authority over the organization, but theorists such as Professor Charles Handy believe that a firm’s best long-term interests are served by paying close attention to the needs of each of these stakeholders. The modern view is that a firm has responsibilities to all its stakeholders i.e. everyone with a legitimate interest in the company. These include shareholders, competitors, government, employees, directors, distributors, customers, sub-contractors, pressure groups and local community. Although a company’s directors owes a legal duty to the shareholders, they also have moral responsibilities to other stakeholder group’s objectives in their entirely. As a firm can’t meet all stakeholders’ objectives in their entirety, they have to compromise. A company should try to serve the needs of these groups or individuals, but whilst some needs are common, other needs conflict. By the development of this second runway, the public and stakeholders are affected in one or other way and it can be positive and negative.
ABSTRACT: The quantity of accounting fraud cases keeps on rising. Fraud is a consistent thing that will reliably be around, and in a bigger number of routes than just a single. An extensive apportionment of organizations out there fighting fraud, either from within the organization, or from outside the organization. Knowing how to manage this is essential for an organization to be productive over an extended period of time. The investigation regarding the matter of accounting fraud will utilize sources from the web and the DeVry School Library.
Auditing has been the backbone of the complicated business world and has always changed with the times. As the business world grew strong, auditors’ roles grew more important. The auditors’ job became more difficult as the accounting principles changed. It also became easier with the use of internal controls, which introduced the need for testing, not a complete audit. Scandals and stock market crashes made auditors aware of deficiencies in auditing, and the auditing community was always quick to fix those deficiencies. Computers played an important role of changing the way audits were performed and also brought along some difficulties.
Stakeholders refer to individuals or groups of people that have an interest in a business. Management argues that as long as there is wealth for shareholders, then anything is done in a responsible manner and things should be done to promote the interest of other stakeholders.
Audit is a process to evaluate and review the accounts and financial statement objectively. We can divide it into internal auditors and external auditors. Internal auditors have a inner knowledge of business process. Auditor has access to the much confidential information and all levels of management. But they may lose their judgement and they are not acceptable by the shareholder. “The overall objective of the external auditors is to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to report on the financial statements in acco...