Final answer:
Financial statements need to be consolidated when separate incorporation is maintained, which affects accounting records by normalizing intercompany relations and policies. Significant legal changes reflect a growing demand for government oversight in corporate matters.
Step-by-step explanation:
When separate incorporation is maintained but the entities are part of a larger group, what needs to be consolidated are the financial statements of the parent company and its subsidiaries. Consolidation ensures that the financial information is presented as if the group of companies was a single entity. This affects accounting records by requiring the elimination of intercompany transactions, the use of uniform accounting policies, and the presentation of non-controlling interests.
In regards to the question about major laws and decisions affecting corporations, important regulatory changes reflect shifting perspectives on the government's role in corporate oversight. For example, legislation like the Sarbanes-Oxley Act was enacted in response to corporate scandals, reinforcing the need for transparency and accountability. Such laws are indicative of an era where there is increased expectation for government intervention in the private sector to ensure fair practices and protect stakeholders.