Identify the stakeholders affected by the externalities

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Reference no: EM131307144

Task

Question 1 (1000 words)

Mather and Peison (2006) report that public debt contracts tend to have a lower average number of accounting based debt covenants as well as less binding debt covenants relative to private debt contracts. (For example, in relation to debt-to-asset constraints in both public and private debt agreements, the covenants in the public debt agreements were found to be "looser: meaning that the ratio percentage is typically higher in the public debt contract.)

You are required to write an essay explaining why this would be the case, supporting your arguments with references to Mather and Peirson (2006) and other relevant sources.

Question 2 (1000 words)

Assume that a government regulator makes a decision that all companies with a dead office in Australia must separately disclose, within their annual financial reports, the amount of expense incurred in relation to the training of employees. The companies must also spend at least 5 per cent of their reported profits on training employees.

You are required to write an essay that

a) Explains the decision made by the regulators in terms of public interest theory
b) Explain the decision made by the regulator in terms of the economic interest group theory of regulation.

Support your arguments with references in APA 6 style from relevant sources.

Question 3 (1000 words)

Identify a listed company, and then

a) Identify at least one positive and one negative externality generated by the organisation and identify the stakeholders affected by the externalities.

b) Would these externalities directly impact on the income or expenses (and therefore profit) of the organisation?
c) In your opinion, is the failure to recognise externalities a fundamental limitation of our current financial reporting requirements? Explain your answer.

Verified Expert

In this solution there were 3 task in first we have discussed about the public bad private covenants, in second task we have discussed about the public interest theory of regulations and economic interest theory of regulation in respect to expenditure made on employee training and lastly in the third task we have discussed about the externalizations provided by the company both positive and negative. Apart from the impact of externalizes on the financial position of the entity is also discussed.

Reference no: EM131307144

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Reviews

len1307144

12/10/2016 2:04:18 AM

For this assessment you are required to use APA 6 referencing to acknowledge the sources that you have used in preparing your assessment. Please refer to the CSU referencing guide. In addition a very useful tool for you to use that demonstrates how to correctly use in text referencing and the correct way to cite the reference in your reference list can be found

len1307144

12/10/2016 2:03:43 AM

Question 3: High Distinction A listed company and one positive and one negative externality are correctly identified. Affected stakeholders are identified. (SLO2 A detailed explanation of the terms is provided, demonstrating a high level of understanding of the context of the information in relation to the question. The terms are explained with the additional use of examples. Impact of externalities on financial reports. (SLO2). The essay correctly identifies the impact on the profit of the organisation. The student's perspective is clearly articulated and supported providing an insightful perspective on the issues surrounding financial reporting. Further comments on other relevant financial impacts. Recognition of limitations for financial reporting. Response provides a clear, deep and critical analysis that draws on source material as well as the student's own thoughts. Well communicated and supported.

len1307144

12/10/2016 2:03:39 AM

Question 2: High Distinction Explains the decision in terms of public interest theory (SLO 4) Response provides a clear, deep and critical analysis that draws on source material as well as the students own thoughts. A well communicated and supported conclusion is reached. Explains the decision in terms of public interest theory (SLO 4) Response provides a clear, deep and critical analysis that draws on source material as well as the students own thoughts. A well communicated and supported conclusion is reached.

len1307144

12/10/2016 2:02:58 AM

Question 1: High Distinction Description and identification of relevant theories (SLO 4) Exemplary description of all of the key issues and underlying assumptions thoroughly articulated. A high level of understanding demonstrated. Critical Capacity and use of Source Material: Does the response demonstrate and analyse the reasons behind the differences between public and private debt agreements? Response provides a clear, deep and critical analysis of both the issues and demonstrates a very high level of understanding of the underlying theories. Well communicated and supported, relying on a wide variety of source material.

len1307144

12/10/2016 2:02:21 AM

Need to follow the instruction, as given below the assignment question. Information should be based on Australian policy. Please make sure you are answering according to the question. Please try to understand what they are asking for and answer correctly.

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