Accounting management assignment help on: Globalization

Introduction

Globalization

It is very clear that the globalization comprises the emphasis on the global financial transactions, exclusion of global trade restrictions and enhancement in the communication worldwide. It can be said that the Country Australia is involved in investment, trade, technology transfers, financial flows and the labor migration throughout its formation as the colony. There are several factors which have made this transformation

Factors Responsible for the Transformation

The diversification of the new markets: capital markets and foreign exchange are related globally (Stokes, 2007). They work for 24 hours in a day with transactions anywhere in world possible in actual time. It has been examined that floating of Australian dollar and financial deregulation since 1983 strengthened the consequence of the globalization on the economy of the Australia.

New technology and globalization tools– In general, mobile phones, communication networks, internet, and email have all increased the globalization process. They all have enhanced the spread of the communication and knowledge transfer (Gittins, Marris, & Stokes, 2001). Consumers of the Australia might buy goods and services from any country in world and transfer funds among purchase shares or accounts in any main market. The businesses of the Australia may sell their products at the fraction of cost and revealed to the international market.New institutional participants – The WTO has developing power over national government. In general, multinational companies have more authority as compared to many nations. Financial dealers and hedge funds are capable for manipulating the financial flows and rates of exchange and leaving countries vulnerable in their time.

New restrictions and rules – Multilateral contracts on services, intellectual rights, and trade are supported by robust mechanisms of enforcement and minimize the objective for the national government for developing their own policies of economic.

Impact of the Globalization

The impact of the globalization after year 1990 has initiated various new components in the financial market and finds out the value of the exchange rate of the nation. This was not applied only to Australia and we can saw in several other countries as well. First, trade in services and goods create up the smaller part of the supply and demand for the currency. In world economy, compensation for the global trade accounts for only 1% of the global exchange transactions. The entire global requirements of the exchange for importing and exporting of services and goods in country Australia is least than 3% of the entire implementation of global exchange turnover into dollars of the Australia (Gittins, Marris, & Stokes, 2001). The major objective for the global exchange trading is global financial transfer of the funds. Financial flows may take several forms. The fastest developing area has comprised currency, commodity derivatives, interest rate and equity. It is also viewed that approximately 50% of routine global exchange turnover in comparison to dollars of the Australia comprises options and swaps. This development in short period fund transfers and hedging has enhanced the volatility of the exchange rate. Generally, the reduction in rates of interest must have enhanced the dollar of the Australia whereas traders of the foreign exchange think that the minimization in rates of interest could enhance the profits in U.S in future and ultimately increase the value of the US dollar. In general, Reserve Bank is highlighting the enhancing function of the market dynamics like momentum trading and trend following in finding out rates of exchange (Rossi, 2008). It has also evaluated that second element of the globalization comprises the possible consequence of the alterations in the international market on the economies. This shows businesses refer the possible entry of global competitors in their markets. The pricing strategies of businesses plan and policies of the employment based upon what would happen if economical TNC’s or foreign producers entered into the market. It shows that businesses refer or set up their operations in the countries where gains are estimated to be highest. This has prevailed in the Country Australia with the shift to individual agreements and developing number of workforce. Whereas, few greatly skilled workers might be advantageous from this and marginalized and low skilled workers are required to lose out with the help of bad conditions of working and least job security. It is clear that economy of the Australia is dependent upon the international economy. Australia should export commodities and goods to another country so that it may earn funds to pay for commodities and goods it imports.Role of the Australian Government in Globalization

The Government of the Australia in current decades have been shifting Australia more in the global market place (Anderton & Whalley, 2006).  The Australian Government has considerably concentrated its assistance expenditure towards the governance programs in 5 basic areas such as enhanced financial management, strengthened justice and law, enhanced effectiveness of the public sector, formation of the civil community and strengthened the democratic systems. In Australia, there has been constant structural reform throughout the previous two decades comprising tariff reform, reform of financial market, reform of government businesses enterprises, increasing national policy, alterations in rules of foreign investment, tax reform and reform of arrangements of corporate governance (Gittins, Marris & Stokes, 2001). It is viewed that treasury 1999 highlights the major concentration of the reform and subjected to private sector in Country Australia to competition from international and domestic sources and enhancing the efficiency of the public utilities (Hartmann, 2010). The required advantages of reforms are increased productivity and lower prices that in turn minimize the cost of the inputs for other industries and enhance aggregate opportunities of employment (Reinert, 2007). Another desired advantage is to coordinate Australia fully in the global economy. Few economists claim that globalization has restricted the capability of the governments for using the monetary and fiscal policy for managing the macro economy and accomplish full employment. The treasury thinks that the international financial market may pose severe cost on the governments which view what markets seem as non-appropriate policies and it is clearly indicated that the poor policies are penalized by the investors. In case of Australia, financial market is concerned with ability of the Australia for achieving robust sustainable growth with no any increasing unsustainable or inflation account deficits.

The financial dealers and traders view a low rate of interest, low inflation, low deficit in current account, high rate of growth, small sector of public and budget surplus. If the Australian Government may not accomplish these policies, then markets shall punish it. It is examined that Australia is more integrated into globalized economy and dependent upon the policies and activities of globalization (Boudreaux, 2008). The future of the Australia shall move with the flow of the globalization. In general, globalization of investment markets and business has generated demands from both investors and corporations for the formation of the financial reporting needs which facilitate investment and business activities throughout national boundaries. Global direct investment produces huge advantages to both host and home countries by giving to the effective utilization of the technology, human resources and capital and advances social and economic welfare (Choy, 2006). In fact, an emergence of the international markets and cross-border related financing has pointed out the requirement for globally harmonized accounting standard regimes and financial reporting (Smith, 2006). In regards to this, basic players both internationally and domestically have revealed the commitment towards enhancing the global comparability of the financial reporting. In Australia, ASCPA, PSASB, ICAA, AASB and others have maintained the internationalization of the financial reporting needs (Boudreaux, 2008). Globally, THE IOSCO and IASC have currently agreed to the program specially designed for delivering the accounting standards body that may be implemented by the global companies for the motive of the cross-border raisings of the capital. The internationalization of the economy of the Australia is relied upon the competitiveness of the companies of the Australia and financial service market place of the Australia.  It can be said that accounting standards perform the basic function in increasing competitiveness. Australia is required to have regime of accounting standard which help the Australian companies to access to the capital by both overseas and domestically.

Conclusion

At last, it can be concluded that Globalization brings out the significant opportunities for enhancing the richness of the nations. The Australian Government is trying to make globalization work for the Country Australia. It is very clear that global direct investment creates huge benefits to both home and host countries by offering to the efficient utilization of the human resources, technology and advances social and economic welfare. It could be stated that the Country Australia is more integrated into the globalized economy and relied upon the activities and policies of the globalization. It is advisable that Australia must export more goods and commodities to another country so that it may earn funds to pay for goods and commodities it imports. With the help of globalization, Australia is indulged in trade, technology transfers, financial flows and the migration of the labor throughout its formation as the colony. Lastly, it can be said that internationalization of the economy of the Australia is dependent on the competitiveness of the organizations of the Australia and financial service market place of the Australia.

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