Interest group theory prespective of regulation

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Reference no: EM13496227

Part -1:

Let us assume that the government has become concerned that existing disclosure regulation, tends to fixate on the financial performance of organisation but fails to address other aspects of corporate performance including a failure to provide information about corporate social and environmental impacts as well as about various initiatives and investments an organisation has undertaken to improve its social and environmental performance. As such the government has decides to introduce legislation that will require business corporations to provide information about the social and environmental impacts of their operations as well as the social and environmental initiatives undertaken by the corporations. You are required to do the following:

A) Explain from a public interest theory perspective the rationale for the government introducing the legislation and how the government will ultimately assess whether any proposed legislation should actually be introduced.

B) Predict from a capture theory perceptive the types of constitutions that will benefit in the long run from any social any environmental disclosure legislation.

C) Predict from an economic interest group theory prespective of regulation whether any potential legislation to be introduces will lead to an increase in the accountability of corporation in relation to their social and environmental performance despite any implications that this increased corporate accountability might have for the financial success of large but heavily polluting organisation.

Part -2:

The website of the FASB ( as at early 2009) states that FASB intends :

To promulgate standards only when the expected benefits exceeds the perceived costs .while reliable, quantitative cost benefit calculations are seldom possible, the board strives the determine that a proposed standards will meet a significant need and the cost it imposes, compared with possible alternatives are justified in relation to the overall benefits.

Do you think that cost benefit considerations will be different in different countries? If so how would cost benefit considerations be determined by a global accounting standard-setter such as IASB?

Critically analyse and evaluate the arguments for, and against, for each of the case studies. Which arguments do you consider to be more compelling? (In other words, what is your opinion?)

Reference no: EM13496227


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