Joni Young (2006) criticized the Financial Accounting Standards Boards (FASBs) focus on providing information to investors and
Question:
Joni Young (2006) criticized the Financial Accounting Standards Board’s (FASB’s) focus on providing information to investors and creditors. She wrote:
From the perspective of a rational, economic decision-maker, sweatshop labor is significant or meaningful only to the extent it reduces cash outflows (and increases profits) by reducing labor costs. Likewise, the elimination of health care benefits … can be considered meaningful or significant only to the extent that these actions may reduce an entity’s future obligations…. Indeed, the impact of corporate actions and choices upon the lives of current and former employees, the environment, communities and almost anyone or anything other than investors and creditors is likely to be regarded as irrelevant, insignificant, meaningless and inappropriate for inclusion in accounting reports.
A. Should companies try to measure their effects on the environment?
B. Should they try to measure their effects on their employees?
C. Do you agree that a focus on measuring profits, but not measuring other impacts of the corporation, can have bad effects on society?
Step by Step Answer:
Introductory Accounting A Measurement Approach For Managers
ISBN: 9781138956216
1st Edition
Authors: Daniel P. Tinkelman