Student: Business and Milton Friedman

Topics: Business, Business ethics, Stock exchange Pages: 9 (2907 words) Published: August 22, 2013
Accounting for managers BSMAN3009
ASSESSMENT 1: Report

Lecturer:
Student’s name:
Student’s number:
Table of contents
I. Executive summary…………………………………………….

II. Introduction…………………………………………………….

III. From a perspective accounting, what are the “rules of game” that businesses must follow?.........................................

1. Company legislation………………………………………... 2. Accounting standard……………………………………….. 3. Stock exchange………………………………………………

IV. In the current environment, is Milton Friedman’s statement as relevant in 2013 as it may have been in 1970?.....................

V. Conclusion………………………………………………………

VI. Reference………………………………………………………..

I. Executive summary

This is a research of analyzing the statement of Milton Friedman, which was posted on the New York Time in 1970. Following his idea we can see that the business need to do the best to increase its profit which he called that is social responsibility. However the changing of the world has denied his idea of social responsibility of a business by figure out the demand from consumer or shareholder, high pressure of the globalization to business. All of that factors has change the culture and the vision of business in the last decade. In the other hand, Milton Friedman had a forever right idea which is a business must “stays within the “rules of the game””. Although his idea of social responsibility has been denied, the idea of a business must follow the rules and regulation will have been right.

I. Introduction
“There is one and only one social responsibility of business – to use its resources and engage in activities design to increase its profits so long as it stays within the rules of the game…” (Milton Friedman, 1970) According to the statement of Milton Friedman at the time of 1970, his vision of business is about the using the resources of the company in activities to design to increase its profit as long as possible. Milton Friedman has described business as a game that has the rules that every businesses must follow to survive and to win the game. Base on the statement of Milton Friedman we can recognize the significant factor of a business to be run smoothly and strongly is not only engage in increasing its profit but also follow the rules which considered as laws or legislation of the market that it taken in. In the other point of view, the game in the statement of Milton Friedman can be seen as the area or the countries that a business is joining which each of the area or country has its own rules. There for, business must “stay within the rule of the game”. II. From a perspective accounting, what are the “rules of game” that businesses must follow? From a perspective accounting, the rules of game that business must follow are the three level of accounting which are rules of Company legislation, Accounting standard and Stock exchange which apply to accounting entities. 1. Company legislation

Company legislation applies to all companies, although public companies have more stringent rules than private companies. Specifically companies are required to present to share holders at an annual general meeting audited statements which comply with accounting standard. There are some company legislations, which are created by Australia Accounting Standard Board (AASB). For instant: First-time Adoption Of Australian Accounting Standards (AASB 1): This compiled Standard applies to annual reporting periods beginning on or after 1 January 2013 but before 1 July 2013. Early application is permitted. It incorporates relevant amendments made up to and including 18 December 2012. Prepared on 29 April 2013 by the staff of the Australian Accounting Standards Board. The objective of this Standard is to ensure that an entity’s first Australian-Accounting-Standards financial statements, and its interim financial reports for path of the period covered by those financial statements, contain high...
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