Business law Essay Example | Topics and Well Written Essays - 1000 words - 11

Business law - Essay ExampleThe two form _or_ system of government reforms considered in Australia include the proportionate liability and statutory capping schemes2. The mixed professional bodies governing auditing in Australia determine application of statutory capping. Nonetheless, statutory capping has various negative policy implications. One, it is a disadvantage to third parties who may be innocent victims of the auditors negligence. Two, it may induce the auditors to charge freeze off fees as they would expect to pay damages in case of a legal suit. Third, it allows for government disturbance in the auditing profession, which would hinder the independence of auditors.One. Tel Communication familiarity reported losses of $290 million as a result, its share price divulged and the directors were sued for negligence. ASIC sued Jodee Rich and Mark Silberman for failing to meet their duty of care causing the collapse of the company in May 2009. ASIC claimed that by failing to communicate true fiscal performance and financial position of the company, these directors did not exercise due care and diligence, which resulted to the cancellation of the proposed rights issue in 20013.The directors were found not flagitious of negligence on accounts that the summary presented by ASIC about Mr. Richs evidence was considered as false. The reckon also implemented the business judgment rule under the Corporations Act 2001, Section 180(2). Directors whose conduct breached instalment 180(1) were provided defense in the business judgment rule4.HIH Insurance was among the biggest insurance companies in Australia. However, in March 2001, the company lost a value of about $5.3 billion and, in turn, became insolvent. Some management member was sued for ruse after the Prime minister, John Howard, created the Royal Commission to investigate the collapse of the company. Rodney, the main defendant, had three unbarred loan