FINANCE: Influences

Question 1

Government Influences

Answer 1

• ASIC: Australian Securities and Investment Commission
• Company Taxation

Question 2

What is ASIC

Answer 2

Australia’s independent government body that regulates the corporate sector, seeking to improve corporate governance and protect consumers and potential investors
main task= enforce various pieces of legislation tha companies have to obey - The Corporation Ac (2001)

Question 3

How does ASIC influence

Answer 3

• sets rules about information that must be disclosed when issuing shares, and financial reports that businesses must prepare every year in disclosing the performance of the business to stakeholders.
• covers issues such as takeovers and insolvency. Financial managers must be careful to comply with all of ASIC’s requirements, which means that they have to keep up to date with the law.

Question 4

failure to comply ASIC

Answer 4

faces a range of punishments starting from fees/fines, with the potential for more serious legal action for serious and repeated or continues failures to comply (including imprisonment for financial managers).

Question 5

what is company tax

Answer 5

• tax that a business must pay to the government on the profits that they earn.
• paid before profits are distributed to shareholders as dividends

Question 6

why is he corporate tax rate important

Answer 6

it affects profitability and profits available to retain in the business.