Internal and external stakeholders

In management[ edit ] In the last decades of the 20th century, the word "stakeholder" became more commonly used to mean a person or organization that has a legitimate interest in a project or entity. In discussing the decision-making process for institutions—including large business corporationsgovernment agenciesand non-profit organizations —the concept has been broadened to include everyone with an interest or "stake" in what the entity does. This includes not only vendors, employeesand customersbut even members of a community where its offices or factory may affect the local economy or environment.

Software audit review An information technology audit, or information systems audit, is an examination of the management controls within an Information technology IT infrastructure.

These reviews may be performed in conjunction with a financial statement auditinternal auditor other form of attestation engagement.

Identifying Internal and External Stakeholders | The Denver Foundation Inclusiveness Project

Financial audit Due to strong incentives including taxationmisselling and other forms of fraud to misstate financial information, auditing has become a legal requirement for many entities who have the power to exploit financial information for personal gain.

Traditionally, audits were mainly associated with gaining information about financial systems and the financial records of a company or a business. The opinion given on financial statements will depend on the audit evidence obtained. Due to constraints, an audit seeks to provide only reasonable assurance that the statements are free from material error.

Hence, statistical sampling is often adopted in audits. In the case of financial auditsa set of Internal and external stakeholders statements are said to be true and fair when they are free of material misstatements — a concept influenced by both quantitative numerical and qualitative factors.

But recently, the argument that auditing should go beyond just true and fair is gaining momentum.

Tips for identifying internal stakeholders

In simple words, the term, cost audit means a systematic and accurate verification of the cost accounts and records, and checking for adherence to the cost accounting objectives.

According to the Institute of Cost and Management Accountantscost audit is "an examination of cost accounting records and verification of facts to ascertain that the cost of the product has been arrived at, in accordance with principles of cost accounting.

The audit must therefore be precise and accurate, containing no additional misstatements or errors. Due to the increasing number of regulations and need for operational transparency, organizations are adopting risk-based audits that can cover multiple regulations and standards from a single audit event.

Audit - Wikipedia

Although the process of producing an assessment may involve an audit by an independent professional, its purpose is to provide a measurement rather than to express an opinion about the fairness of statements or quality of performance.

For publicly traded companiesexternal auditors may also be required to express an opinion on the effectiveness of internal controls over financial reporting. External auditors may also be engaged to perform other agreed-upon procedures, related or unrelated to financial statements.

Most importantly, external auditors, though engaged and paid by the company being audited, should be regarded as independent. For publicly traded companiesexternal auditors may also be required to express an opinion on the effectiveness of internal controls over cost reporting.

Cost auditing Government Auditors review the finances and practices of federal agencies. These auditors report their finds to congress, which uses them to create and manage policies and budgets.

Government auditors work for the U. Government Accountability Office, and most state governments have similar departments to audit state and municipal agencies. For bigger public companiesexternal secretarial auditors may also be required to express an opinion on the effectiveness of internal controls over compliances system management of the company.

Internal auditors are employed by the organisations they audit. They work for government agencies federal, state and local ; for publicly traded companies; and for non-profit companies across all industries.

The internationally recognised standard setting body for the profession is the Institute of Internal Auditors - IIA www. The IIA has defined internal auditing as follows: It helps an organisation accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes".

Internal audit professionals Certified Internal Auditors - CIAs are governed by the international professional standards and code of conduct of the Institute of Internal Auditors. Professional internal auditors are mandated by the IIA standards to be independent of the business activities they audit.

This independence and objectivity are achieved through the organizational placement and reporting lines of the internal audit department. Internal auditors of publicly traded companies in the United States are required to report functionally to the board of directors directly, or a sub-committee of the board of directors typically the audit committeeand not to management except for administrative purposes.

Professional internal auditors also use control self-assessment CSA as an effective process for performing their work. This differs from the external auditorwho follows their own auditing standards.

The level of independence is therefore somewhere between the internal auditor and the external auditor. The consultant auditor may work independently, or as part of the audit team that includes internal auditors.

Consultant auditors are used when the firm lacks sufficient expertise to audit certain areas, or simply for staff augmentation when staff are not available. Performance audits[ edit ] Performance audit refers to an independent examination of a program, function, operation or the management systems and procedures of a governmental or non-profit entity to assess whether the entity is achieving economy, efficiency and effectiveness in the employment of available resources.

Safety, security, information systems performance, and environmental concerns are increasingly the subject of audits. With nonprofit organisations and government agenciesthere has been an increasing need for performance audits, examining their success in satisfying mission objectives. Quality audit Quality audits are performed to verify conformance to standards through review of objective evidence.Stakeholder Theory.

Organizational management is largely influenced by the opinions and perspectives of internal and external stakeholders.

Other definitions of External Stakeholders

A stakeholder is any group, individual, or community that is impacted by the operations of the organization, and therefore must be granted a voice in how the organization functions.

Internal stakeholders are people who are already committed to serving your organization as board members, staff, volunteers, and/or donors. External stakeholders are people who are impacted by your work as clients/constituents, community partners, and others.

I had a good feeling about our internal equity and knew what my job was within the business and within my team.

External Stakeholders are individuals or groups outside a business or project, but who can affect or be affected by the business or project. Arguably external stakeholders wield the most influence on the long term success of a business or project, because external .

This lesson will consider the internal and external customer, how marketing is used to build and nurture customer relationships, and will .

Stakeholders can be divided into two categories; internal stakeholders and external stakeholders. Stakeholders use a variety of information for decision making purposes, and the information that is available to stakeholders will depend on whether the stakeholder is an internal or external stakeholder.