In 2006 the Australian Government established an inquiry into corporate social responsibilities with...

Question

In 2006 the Australian Government established an inquiry into corporate social responsibilities with the aim of deciding whether the Corporations Act should be amended so as to specifically include particular social and environmental responsibilities within the Act. At the completion of the inquiry it was decided that no specific regulations would be added to the legislation, and that instead, ‘market forces’ would be relied upon to encourage companies to do the ‘right thing’ (that is, the view was expressed that if companies did not look after the environment, or did not act in a socially responsible manner, then people would not want to consume the organisations ‘products, and people would not want to invest in the organisation, work for them, and so forth. Because companies were aware of such market forces they would do the ‘right thing’ even in the absence of legislation).You are required to explain the decision of the government that no specific regulation be introduced from the perspective of:(a)public interest theory (5 Marks)(b)capture theory (5 Marks)(c)economic interest group theory of regulation (5 Marks)
	
Document Preview: BAC21 Financial Accounting Theory Semester XXXXXXXXXXAssignment				InstructionsThis is an individual assignmentThe assignment is to be submitted on the Moodle in TurnitinThe Due date is 16/04/2017 by 23:55 pm The weight of the assignment is 10%  The assignment is out of 50 MarksAnswer the following questions Q1:Chambers' theory of accounting, Continuously Contemporary Accounting, relies on the notion of the ‘capacity to adapt’. What is the capacity to adapt and how is it determined?                                                                       XXXXXXXXXX10 Marks)Q2: In 2006 the Australian Government established an inquiry into corporate social responsibilities with the aim of deciding whether the Corporations Act should be amended so as to specifically include particular social and environmental responsibilities within the Act. At the completion of the inquiry it was decided that no specific regulations would be added to the legislation, and that instead, ‘market forces’ would be relied upon to encourage companies to do the ‘right thing’ (that is, the view was expressed that if companies did not look after the environment, or did not act in a socially responsible manner, then people would not want to consume the organisations ‘products, and people would not want to invest in the organisation, work for them, and so forth. Because companies were aware of such market forces they would do the ‘right thing’ even in the absence of legislation).You are required to explain the decision of the government that no specific regulation be introduced from the perspective of:(a)public interest theory  (5 Marks)(b)capture theory  (5 Marks)(c)economic interest group theory of regulation (5 Marks)Credit card profit soars but ANZ feels no guiltAnthony HughesThe Sydney Morning Herald, 27 April 2001, p. 3ANZ denied yesterday it was overcharging customers after reporting a 71 per cent increase in credit card profits.The bank, which only...

Robert · Accepted Answer

Financial Accounting Theory
Q1: Chambers’ theory of accounting, Continuously Contemporary Accounting, relies on 
the notion of the ‘capacity to adapt’. What is the capacity to adapt and how is it 
determined?  
In the particular theory of Continuously Contemporary Accounting Chamber’s seek that the 
business firm trading in the external versatile environment with the prime objective of 
ascertaining profits and maximisation of its owner’s wealth, business managers must endeavour 
to change in accordance with the external market aggressive business condition for the purpose 
of survival in the long run. Capacity of adapt is the ability of the firm to change its procedures 
according to external market changes. In this approach it is assumed that to guide or support the 
future actions of the enterprise is prime objective of accounting procedures (Kelly, et. al., 1999).  
The Continuously Contemporary Accounting is basically based on the idea of versatile conduct 
that sees the organizations trading in the external market as continually being prepared to discard 
the benefit if this activity is to its greatest advantage. In the Versatile market movement in prices 
affect the earnings for particular financial year and the ultimate position of resources at the end 
of the accounting year. The conducts of the enterprise while representing its financial statements 
determine its overall capacity to adapt (Kelly, et. al., 1999). While taking in instance the 
financial statement of particular enterprise its ability to change according to external market 
requirement is depicted when the firm its financial resources and liabilities at the current market 
price or exit price in the financial statements (Tinkelman, 2015).  
Question 2  
Public interest theory   
The public interest theory on the base of given case study assumes the fact that the organsiation 
in the external market is concerned with the profit making approach. The organisation does 
operate in an inefficient manner and ignore the societal benefits until and unless their profits are 
affected in any way or they have face out a legal hurdle due to non compliance of any law. In 
order to put an effective control and monitoring government of particular geographical regions 
has to impose certain laws so that the organsiation work in social interest (Den Hertog, 2010). 
The philosophy behind the implementation of strict laws by the administration offices set up in 
particular nation is to control the business to the greatest advantage of the general public.  
Capture theory  
The capture theory and hypothesis expresses the fact that the administration offices are set up by 
industry representatives, consequently these representatives of the business work to the greatest 
advantage of the business. This hypothesis contradicts the above approach of public interest 
theory, according which law of the land regulates the ethical behaviour of an organsiation 
(Baxter, 2011). These organizations produce a wasteful assignment of assets of the general 
public instead of making a designation towards a beneficial outcome according to the general 
public's requirements.  Capture theory do showcase the inter connectivity between the 
organisation and the relevant controlling governmental bodies. The main authorities sitting in 
those government bodies are the past or present employees associated with the industry, they 
generally give biased decision with the hope of getting an unethical consideration from the 
industry. Ultimately public is suffered from this approach. But in this capture theory there is 
certain disclosure requirement which the organsiation is pertained to fulfil so this regulation is 
somewhat beneficial to certain extent for its stakeholders at large. As per Baxter (2011),

In 2006 the Australian Government established an inquiry into corporate social responsibilities with the aim of deciding whether the Corporations Act should be amended so as to specifically include...

Solution

Answer To This Question Is Available To Download

Related Questions & Answers

Submit New Assignment