Evaluate the usefulness of published accounting information to stakeholder groups of Tesco (usually it would be 2 advantage and 2 disadvantage)

Published accounts are the documents that summarises the financial position of a business entity.Firstly an advantage of the published accounts of Tesco Plc for its competitors is that they can use the information published to compare their performance against Tesco and can therefore benchmark their own performance. For example in 2009 the net profit margin for Tesco was 5%, therefore competitors such as Asda can use this information to evaluate if they need to put procedures in place to improve their own net profit margin in order for them to remain competitive. An example could be Asda reducing their expenses whilst maintaining their current high sales revenue. Through increased focus on reducing costs this may result in these competitors gaining a cost advantage in an industry which competition is very strong. The increased profits gained from this reduction in costs can be reinvested into improving customers shopping experience thereby assisting competitors attract and retain a large consumer base, leading to increased sales , profit and market share. However, for competitors published accounts can be a disadvantage. Currently Tesco is the UK's largest retailer therefore other companies will be comparing their financial performance with the best in the business. Since each company tends to adopt their own accounting policies this makes direct comparisons difficult, for example some retailers may account for particular expenses differently or use a different method for depreciation, making it difficult to precisely determine the profitability of a business. For example a competitor may view Tesco net profit margin as 5% and set this as their own target, however this figure may be distorted or "window dressed", therefore they could be working towards a figure that is not close to what Tesco are achieving. This could be very costly to the business as it could cause inaccurate decision making thereby being detrimental to business success. Furthermore it would be a waste of time and resources that could of been spent pursuing other ways to achieve competitive advantage e.g. social media campaign. Based on these arguments i believe that published accounting information can be very useful to various stakeholders of a business. For competitors it can be used to benchmark their own performance, as they wish to compare with the leading retailer which is Tesco. However this depends upon the accuracy of the accounts and the availability of the information out there. So i recommend that stakeholders such as competitors use published accounts as long as it has been audited in order to increase the accuracy and reliability of the data. This will ensure positive impacts for this stakeholder group.