:Topic 1:Introduction and Regulatory Framework- Regulation can relate to two things: Regulate what an organisation can or must do (eg trade, pay tax, employ staff, pay debts), Regulate how an organisation functions (eg how it comes into being, how it is managed and operated and how and when it ceases to be). Why are corporations used (good and bad)? To allow for investment, To allow capitalism to flourish, To permit the sharing of risk, To permit investors to shelter from risk, To permit investors to deny responsibility, To distribute responsibility, To misallocate resources, To allow efficient allocation of resources. Two theories: Contractualist theory, Stakeholder theory. Regulation tends to try to connect the two theories by acknowledging the importance of the corporation in encouraging economic growth and appropriate risk taking BUT also recognising that there should be some control over corporations given their importance to society (as a conduit or pipeline through which resources are channelled into goods and services). Where is this regulation?-Corporations Act 2001, Australian Securities and Investments Commission Act 2001, These are both federal or commonwealth (central government). Subordinate legislation also (regulations under these Acts plus ASX listing rules, statements and Guides, Accounting Standards). Finally, A lot of the important principles relating to corporations and their responsibilities have evolved via case law. The (Corporations) Act has been described as “Bloated” – why???, Moves have been made to simplify the Act, but every time this happens, something else comes in to make it bigger again! The Administrative and Enforcement bodies ASIC, Under ASIC Act, Corporations and Markets Advisory Committee, Takeovers Panel, Companies Auditors and Liquidators Disciplinary Board, Financial Reporting Council, Australian Accounting Standards Board,