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Akinsete Adekunle Adesola 119029466 Business Administration MBA Part Term (Stream 3) ACC 810 (Financial Accounting for Business) Conflicts in User’s Requirement of Financial Information INFORMATION REQUIRED The workers engages in the running of the business, need to know the profitability of the business, the extent of job security, to show the stability of the company and ability to meet wage demand and improving working condition SUGGESTION *Workers, Management consultation forum which implies *Good cooperate governance *Sound employee benefit/ retirement scheme.
POTENTIAL CONFLICTS *The employees usually use profitability to justify the need for wage and salary increase. *Senior management worries that large profit will increase the wage demand, so they ensure that reports show only a small percentage of the total profit 2 SHAREHOLDERS The people who invested their *Shareholders are interested money in the business need to in optimistic profitability know the dividend paying and cash flow forecast. capacity, actual profit and *Shareholders interest is profitability, capital growth wealth maximization while and future growth of the management interest is business profit maximization CUSTOMERS 3 Customer use financial *The customers are on the information to access the lookout for the profit margin financial position of the which the business is business. making on their transactions *To be able to ascertain the to be able to determine if strength of the business there is a rip-off and the * To guarantee the security of basis of that negotiation for supply, profit margin and price price reduction and determination discount ; rather management want to increase prices for improved profit margin 4 TAX AUTHORITY The authority uses the *The tax authorities want to information to ascertain the get the maximum tax taxable profit of an possible from the business organization and for tax for government to perform collection purposes. their role in the state *Management wants to pay a lower tax thereby engaging in tax avoidance and in tax 1 EMPLOYEES
*Good dividend policy, *Good corporate governance and transparency *Regular general meeting i.e. AGM *Integrity financial reporting *Good corporate social responsibility *Product differentiation varity *Good marketing mix and competitive pricing
*The application of cost benefit principle by government and citizen performance of cooperative civil responsibility *Government should show transparency and goodwill *Fulfillment of statutory
*Integrity in the financial reporting *Fulfillment of Statutory obligations *sound customer and asset base *provision by bank of competitive and not cut-throat cost of fund *Good clients banker relationship .5 LOAN CREDITORS/ BANKERS The lenders to the business are concerned with the following: *Ability of the organization to repay loan * Ability to pay interest and operational viability of the enterprise. Note that while tax avoidance is lawful. tax evasion is not The lenders require conservative approach in the financial statement about cash flow generating ability of the business and its profitability *High cost funding *Lack of professional competence in handling project and preparing feasibility study. obligations. evasion. *Availability of collateral and access to fund.