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Stigler's 'private interest theory' proposes that regulatory bodies (including accounting standard setters) are made up of individuals who are self-interested, and these individuals will introduce regulation that best serves their own self-interest. If regulators acted in accordance with the predictions provided by private interest theory of regulation, what is the likely of the introduction of regulation aimed at reducing the problems associated with climate change, particularly if business corporations opposed such regulations?
Stigler, G. J. 1971, The politicisation of accounting, Journal of Accountancy, 146(5), pp. 65-72
Required
a. Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler above.
b. explain the standards that are inherent in Global Reporting Initiative (GRI).
c. select a company listed on the ASX and discuss how the company has disclosed Corporate Social Responsible (CSR) issues.
d. Compute company performance in relation to GRI standards and comment on Stigler's theory.
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