MILSESTONE A2
Beast8484
milestone_1.pptxIntroduction.
The Whitlock Company is public accounting firm that I have been working with for the past six years. In the six years I have ensured that I have worked hard and provide my worth through accomplishing the various tasks assigned to me and in the process sharpening my skills and potential. It is for this reason the top management promoted me to the position of head of legal advisor to our clients on matters pertaining the client aspirations to venture into international business. My responsibilities will therefore be advising the clients on the pros and cons of the international business and how to go about.
Whitlock Company where I have been given a promotion.
My hard work , show of skills and potential led to me been promoted.
My responsibility on promotion will entail advising clients on international business.
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Cont.
The company has made much progress since I joined three years later after its establishment and during those years, it has made remarkable milestones which has made it be recognized worldwide. The company is located in Netherlands where its main office is and has several branches all over the world. Some of the service that it offer include; Auditing, Public Accounting, Taxation Accounting, Forensic Accounting and Book keeping.
Environmental issues affecting accounting diversity
The rule and regulations of accounting are affected by different factors which include:
Economic environment
This provide the structure and information that need to be reported and hence a major influence of the financial reporting framework which comprises of:
Economic openness: this is a good environment for investors since it give the notch of good reporting of accounts. With improved reporting of accounts, there is a high interest in investing in such as country.
Privatization: this lead to the availability if finances publicly and have been adopted by various countries such as Pakistan and Iran. It is through privatization that there was need to adopt the International Financial Reporting Standards. (IFRS) in many countries.
Economic development stage: this is possible through raising of more capital and adopt different accounting practices that will ensure development. Hence the framework of the accounting practice have a lot in economic development.
International trade: the method of approach of international trade affect the framework of accounting that have been used national wise. Hence adoption of the IFRS is not easy for many countries but it paramount for all.
Economic environment entails:
Economic openness
Privatization
Economic development stage
International trade
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Political environment
There is a major link between the economic system and the political environment in the determination of the practices to be carried out for rules and regulations. A country political system is very important in the determination of its financial reporting. Developed countries whose democracy if highly rated they have accounting systems that advanced though are prone to changes. Hence it is good to ensure that there is:
Political stability
Accountability
Democracy
Political environment
Political stability
Accountability
Democracy
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Tax and legal environment
Legal environment is mainly addressed through distinction of code law and common law. In common law, countries are obliged to having fair presentations, full disclosure and transparency. This is done with the aim if satisfying the shareholder and protecting their rights. In code laws, there is the enforcement of the national standards of accounting with major keys players involve such as the banks, business associations and labor unions.
In this mode of accounting the reporting system is geared towards the protection of the creditor which is seen through disclosure of less information. Hence the adoption of the IFRS is important in these two case scenario especially where it is difficult in implementing the IFRS in code laws as compared to the countries using the common laws.
Tax and legal environment:
code law :is the enforcement of the national standards of accounting with major keys players involve such as the banks, business associations and labor unions.
common law: countries are obliged to having fair presentations, full disclosure and transparency. This is done with the aim if satisfying the shareholder and protecting their rights.
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Professional environment
The degree of the accounting profession affect the development and the extent of the development in financial reporting. Since accounting profession is broad, it is measured through:
Having adequate accounting standards.
Important professional bodies are paramount.
Accountant qualifications should be adequate
Legal and regulatory backing of rules and regulations should be paramount.
Professional environment
Having adequate accounting standards.
Important professional bodies are paramount.
Accountant qualifications should be adequate
Legal and regulatory backing of rules and regulations should be paramount.
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Business Environment
Factors that affect the diversity of accounting on a business environment include:
The characteristics of the firm: some of the characteristics include;
Size: the financial reporting is dependent on the size of the firm hence the difference between big and small companies.
The sector of the industry: the dominate industries in a country tend to influence the financial reporting, for instance the oil industry.
Legal form: the legal status of a firm affect the financial reporting.
Concentration of ownership: the number of stakeholders in a firm.
The type of privilege the financing system has.
Capital development milestone.
Business Environment:
Factors that affect:
Size
Sector of the industry
Legal form
Concentration of ownership
Capital development
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Cultural Environment
A country’s cultural values plays a key role in their financial reporting. There are various dimensions of the international difference which include: the small versus large, femininity versus masculine. Grays accounting of value he identifies international differences in accounting that he explains they come about and proposes a framework that link the development of financial reporting with culture. The four cultural dimensions that he identified include: statutory control versus namely profession, flexibility to uniformity, transparency to secrecy.
Cultural Environment
Have different dimensions which include:
small versus large, femininity versus masculine
Grays accounting :proposes a framework that link the development of financial reporting with culture.
That is:
statutory control versus namely profession
flexibility to uniformity.
transparency to secrecy.
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International Environment
This contribute majorly in shaping the characteristics of the financial reporting. International firms which are big have a key role in the shaping of the accounting internationally. With experienced staff it plays a key which ensures in the perfect financial reporting systems and process. The bond of the big firms with their client facilitate this through additional of information and there are greater details explained. Many multinational companies ensures that the implementation and adoption of the IFRS is successful and an easy process in that matter.
International Environment
International firms which are big have a key role in the shaping of the accounting internationally.
multinational companies ensures that the implementation and adoption of the IFRS is successful and an easy process in that matter
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Potential Issues
Legal issues: the country laws need to be followed to the letter failure to which it will led to deportation or even imprisonment.
Language barrier: This in one way or another poses a threat especially if one is a foreigner and does not understand the language of the people.
Cultural barriers: due to different ways of doing business the country culture may differ in one way or another in handling of various issues. Netherlands uphold their values and expect everyone to respect that. For instance the country is known for taking contract seriously as compared to other countries.
Political problems: the politics of a given country can change with time which inter affect the business. In our case Netherlands is political stable country and hence conducting of business is less to be affected.
Potential Issues
Legal issues
Language barrier
Cultural barriers
Political problems
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References
Australia, C. (2016). Global Business. Cincinnati OH: Cengage Learning US.
Avadhani, V. (2010). Global business. Mumbai [India]: Himalaya Pub. House.
Martin, J. & Chaney, L. (2012). Global business etiquette (1st ed.). Santa Barbara, Calif.: Praeger.
