Stakeholder Theory in Accounting

Stakeholder Theory in accounting posits that businesses should consider the interests of all parties affected by their activities, not just shareholders. This includes employees, customers, suppliers, the community, and the environment. Instead of focusing solely on profits, companies are encouraged to adopt a broader perspective that values ethical practices and sustainable growth. By recognizing and addressing the needs and concerns of various stakeholders, businesses can foster trust, enhance their reputation, and achieve long-term success. This approach reflects a commitment to social responsibility and balanced decision-making in the realm of accounting and corporate governance.