Company Accounting: Australia-New Zealand, 5th Edition Solution Manual
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Company Accounting 5e Solutions Manual
Peter Jubb Stephen Haswell Ian Langfield-Smtih
Version 5.0
Chapter 1
General introduction
1.1 Give some examples of the ways in which companies affect the
following groups, favourably or adversely: shareholders, consumers,
governments, employees, creditors, the ‘general public’.
The answer to this question is found from the prior experience of students, not in the text. The
question is designed to concentrate attention on the benefits and detriments to different groups
within society of the corporate form. The following table lists some of the aspects that could be
mentioned.
Favourably Adversely
shareholders increased wealth
• dividends
• share price
risk of loss due to:
• commercial factors
• dishonest management
consumers • an efficient and effective
mechanism for meeting demands
of consumers
• effective way of ‘mobilising
capital’
loss of control and bargaining power
governments assist in:
• economic development
• expanding taxation base
moral hazards:
• major company crashes
• need for regulatory intervention
employees • opportunities for employment
• greater remuneration
• scope for advancement
• loss of bargaining power
• risks of limited liability of
employer (employee benefits)
• loss of self-esteem (small cog in
large enterprise)
creditors • increase potential market • risks of limited liability
‘general public’ • economic growth
• increased standard of living
• impact on share values
• increased gap between haves and
have nots
1.2 To what extent should companies be compelled to provide
information to the above-mentioned groups?
This question builds on question 1.1. As noted on page 4 these questions derive from social and
economic policy considerations. Ultimately it comes down to personal preferences. However, as we
will see in chapter 3, arguments can be developed in support of such disclosures, for example, ones
based on protection of company members or the general public.
Peter Jubb Stephen Haswell Ian Langfield-Smtih
Version 5.0
Chapter 1
General introduction
1.1 Give some examples of the ways in which companies affect the
following groups, favourably or adversely: shareholders, consumers,
governments, employees, creditors, the ‘general public’.
The answer to this question is found from the prior experience of students, not in the text. The
question is designed to concentrate attention on the benefits and detriments to different groups
within society of the corporate form. The following table lists some of the aspects that could be
mentioned.
Favourably Adversely
shareholders increased wealth
• dividends
• share price
risk of loss due to:
• commercial factors
• dishonest management
consumers • an efficient and effective
mechanism for meeting demands
of consumers
• effective way of ‘mobilising
capital’
loss of control and bargaining power
governments assist in:
• economic development
• expanding taxation base
moral hazards:
• major company crashes
• need for regulatory intervention
employees • opportunities for employment
• greater remuneration
• scope for advancement
• loss of bargaining power
• risks of limited liability of
employer (employee benefits)
• loss of self-esteem (small cog in
large enterprise)
creditors • increase potential market • risks of limited liability
‘general public’ • economic growth
• increased standard of living
• impact on share values
• increased gap between haves and
have nots
1.2 To what extent should companies be compelled to provide
information to the above-mentioned groups?
This question builds on question 1.1. As noted on page 4 these questions derive from social and
economic policy considerations. Ultimately it comes down to personal preferences. However, as we
will see in chapter 3, arguments can be developed in support of such disclosures, for example, ones
based on protection of company members or the general public.
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Accounting