Interests of stakeholders and importance of effective communication to internal and external stakeholders
Different groups of people have different reasons for wanting accounting information. A business must communicate that information clearly to each group in the right way.
Real World
When Tesco published its 2014 accounts overstating profits by £263 million, shareholders, lenders, and suppliers all received misleading information — demonstrating how poor communication to different stakeholder groups can trigger a crisis of confidence.
Exam Focus
When asked to 'analyse', link each stakeholder group to a specific piece of accounting information and explain why they need it differently.
Essay Framework
Use PEEL to structure every paragraph. Tap each step for guidance and an example.
How well did you know this?