Firstly, Question is that Who are Stakeholders? Simply, we can say that Stakeholders are the parties whose Stake means Interest is linked with the organisation whether directly or indirectly.
Now, we will discuss some possible Internal or External stakeholders of accounting information, whose benefit is associated with the organisation.
Followings you will find a list of parties whose stake directly or indirectly is associated with the business, that’s why they want to get information about business and financial information provider is we know only “ACCOUNTING”, as we earlier discuss that “Accounting is the language of business.” Lets take a look in the followings:
- Managers: These are the people who are responsible to manage the affairs of business and take decisions on different matters daily. So they are directly involved in the activities of the organisation and want to see the result of their efforts, which they have done for the organisation. They need to know the result of their policies and decisions they have made for the betterment of business and obviously they want to know the financial status of the business.
- Owner(s) of the business: These are the persons who make investment in the business and now they want to get information about their financial matters of the business.
- A prospective Investor: When the owner wants to sell a business the parties who are interested to buy this business want to see financial information about the business
- The Lenders: If the owner face difficulty to run the business due to shortage of funds, then he will definitely wants to borrow money from financial institutions or from his personal links for use in the business. The lenders especially Bank or other financial institutions demands the financial record of business to make decision about issuing loans to business.
- Tax Inspector: The Tax Inspector or collector also demand financial records to calculate the amount of tax, which will be payable for business.
- A prospective partner: If the owner want to share ownership with someone else or existing partners want to enter a new partner, then the incoming partner would be asked to provide him financial statements of business.
There are many other users of accounting information, such as Suppliers, Employees, Competitors etc. One obvious fact is that without properly recorded accounting data a business would have many difficulties providing the information to these various users (often referred to as “Stakeholders“).
However, the information produced by accounting needs to be a compromise – so many different groups of stakeholders make it possible to produce accounting information at a reasonable cost in a form that suits them all.