The chapter says that a measurement system can affect society in several ways. As an example, consider
Question:
The chapter says that a measurement system can affect society in several ways. As an example, consider a European-owned company that mines gold in Africa.25 The company is worried that the African people and government will believe it is making too much money, and not sharing enough with the local people. The company uses accounting methods that show it has low profits. Explain whether this decision affects the company’s reactions with the African people and government in any of the four ways listed in the chapter:
A. Does the report of low profits shape how people think about whether the company is treating the local society fairly?
B. Do the low reported profits make the company’s actions seem legitimate?
C. Do the low reported profits affect the actions of:
a. The local government?
b. The company’s own owners and investors?
c. The workers?
D. Are the choices of types of reports ways that the company’s owners exert control over their managers?
Explain your answers.
Step by Step Answer:
Introductory Accounting A Measurement Approach For Managers
ISBN: 9781138956216
1st Edition
Authors: Daniel P. Tinkelman