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Business & Economics

Impact of Stakeholders’ Interests on Financial Accounting Policy-Making: The Case of Lithuania
Kristina Rudžionienė

ABSTRACT. This paper analyses the expectations of particular stakeholder groups’ impact on corporate financial accounting policy-making in Lithuanian enterprises from the Stakeholder theory perspective. This approach presents a premise that many people can be classified as stakeholders, but only the most powerful stakeholders have an impact on enterprise’ financial accounting policy-making. Companies should seek to present a true and fair view of their financial performance and results while making financial accounting policy because stakeholders need informative and truthful accounting data for making right decisions.

On the basis of empirical results it could be stated that the impact of different stakeholders’ interests on financial accounting policy-making depends on the enterprise’ size. The interests of shareholders, media and governmental institutions have the biggest impact on financial accounting in large Lithuanian enterprises, and interests of almost all investigated stakeholders, except regulators, have impact on small and medium enterprises’ financial accounting policy-making, however, this impact is weaker than in large companies. The most important stakeholders in Lithuanian enterprises are investors, regulators, employees. Least important are media and the public. An attitude of small and medium enterprises to stakeholders’ interests does not differ from general average, but interests of shareholders, regulators and media are more important for large enterprises.

KEYWORDS: stakeholders’ interests, Stakeholder theory, financial accounting policy, Lithuania.

JEL classification: M4, P2.