Search

The economic climate for small business in the US from the early 1970s to the mid-1980s was characterized by 'stagflation', which was triggered by large increases in oil prices. Equally sharp price declines of oil in the early 1980s, combined with reduced tax rates, have helped to shift the aggregate supply curve back to the the right. Small Business Conferences held at the White House have identified the following areas where the government can help small businesses: liability insurance and tort reform, exemption from some mandated employee benefits, unfair competition from government and non-profit organizations, and the budget deficit. The overall business climate for small business should remain favorable throughout the 1980s.

Intended turnover rates and job satisfaction levels at CPA firms are examined. Eleven dimensions of job satisfaction are measured by job tenure, education, and sex. Results indicate that intended turnover rates are related to job tenure, but not to education or sex. Employees with bachelor degrees tend to be more satisfied with promotion policies and office support than employees with graduate degrees. Employees with graduate degrees tend to be happier with compensation. Women are less satisfied than men with advancement opportunities and the way in which promotions are given.

The National Commission on Fraudulent Financial Reporting was established in 1985 to identify false or misleading reporting practices and the reasons for their incidence. A Commission report will significantly affect publicly-held companies, independent public accountants, regulatory agencies, and business educators. Many Commission recommendations are not new, and some of them would require long-term change and attendant costs. The Commission concludes that full and fair disclosure is a fundamental obligation of a public company, that the US reporting system is one of the best in the world, and that fraudulent reporting must be reduced if the system is to maintain credibility.

Chief executive officers (CEOs) are generally opposed to hostile takeovers and they feel that they are not in the best interest of stockholders or long-term business interests, according to a survey of 443 CEOs. Results from the survey show that CEOs feel: corporate raiders have a negative influence on the economy; hostile takeovers have a negative effective on long- and short-term planning; and companies do not function more effectively after takeovers. The results show, however, that CEOs are opposed to legislation outlawing hostile takeovers.

The Tax Reform Act of 1986 lowered tax rates for individuals and businesses, after eliminating or reducing deductions and credits, with significant implications for small businesses. Some examples of changes affecting corporations include: eliminated capital gains deductions, revised depreciation schedules, reduced travel and entertainment deductions, eliminated investment tax credits, creation of the alternative minimum tax, reduced dividends-received deductions, limited carryforwards of net operating losses, and repeal of the general utilities doctrine. Capital-intensive industries will suffer more under the new tax law than labor-intensive, consumer-oriented businesses. Tax reform may cause short-term problems for small businesses, but long-term economic benefits will result as business decisions are made for economic reasons rather than for tax purposes.