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Question 1 What mechanisms could be put in place to motivate management to consider the interests of: (a) the owners? (b) the debtholders? Question 2
Question 1 What mechanisms could be put in place to motivate management to consider the interests of: (a) the owners? (b) the debtholders? Question 2 How could accounting regulators use the research conducted by Positive Accounting theorists? Question 3Some researchers who utilise Legitimacy Theory posit that organisations will attempt to operate within the terms of their 'social contract'. What is a social contract? Question 4 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: 1. Public Interest Theory 2. Capture Theory 3. Economic Interest Group Theory of regulation
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