Question

In: Accounting

Sun packaging is a profit-making manufacturing company established during 1998. The company is not fulfilling their...

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.

i. Who are classified as stakeholders?

ii. Discuss how each stakeholder will be affected?

iii. Which principles or concepts of accounting is affected if they do not disclose the information?

Expert Solution

i. Who are classified as stakeholders?

Ans. A person, group, organization or system which affects or can be affected by an organization's actions

ii. Discuss how each stakeholder will be affected?

Ans.

Internal Stakeholder:

1) Shareholders: They are affected by revenues, profits, dividends and Investment Securities etc..

2) Employees: Job Security, Fair and Equal Opportunities, Hikes etc....

External Stakeholders:

1) Customers: Quality of Products, After sales services, New Launches Etc...

2) Supplies: The purchasing power of company, timely repayment of payables Etc..

3) Competitors: New Launches, Technology, price wars Etc....

4) Banks: Repayment of Loans, Performance of company Etc...

5) Government: Taxes, Employment, corporate social responsibility Etc...

iii. Which principles or concepts of accounting is affected if they do not disclose the information?

Ans:

1) Disclosure:

Every company should disclose all relevant information for stakeholders for their decision making.

2) Materiality:

The company should specifically disclose all material information which will have an impact on stakeholders.

3) Going Concern :

Every company should make a statement that it will be operational for the foreseeable future without effect ongoing concern.

ekkarill92 answered 2 years ago

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