Association of Chartered Certified Accountants (ACCA) Certification Practice Test

Who are classified as internal stakeholders of an organization?

1. Customers

2. External auditors

3. Employees

4. Regulators

The correct answer is: Employees

Internal stakeholders are individuals or groups that are directly involved in or part of an organization. Their interests and responsibilities are intrinsic to the company's operations and they have a direct impact on the company's functioning and decision-making processes. Employees are classified as internal stakeholders because they are members of the organization and directly contribute to its activities, goals, and performance. Their work, morale, and commitment influence the overall success of the organization. Employees have a vested interest in the organization's performance since it affects their job security, career advancement, and overall workplace environment. In contrast, customers, external auditors, and regulators are considered external stakeholders. These groups have interests in the organization but are not part of its internal workings. Customers are interested in the products or services provided, external auditors assess the organization's financial statements and compliance from an outside perspective, while regulators enforce laws and regulations but do not engage in the day-to-day operations of the organization.