Effects of Corruption and global Accounting on International Business

Running head: EFFECTS OF CORRUPTION AND GLOBAL ACCOUNTING 1

Effects of Corruption and global Accounting on International Business

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EFFECTS OF CORRUPTION AND GLOBAL ACCOUNTING 2

Consequences of Corruption and global Accounting on International Business

Japan, China and U.S dominate the world’s markets. The domination results in steep

competition among states involved in international business activities (Harris, Kuivalainen, &

Stoyanova, 2012). The rivalry in the world markets has caused business competitors to discover

markets in the third world nations. The antagonism confirms that business organizations

experience various challenges in participating in global ventures. Financial and ethical problems

such as comprehensive accounting and corruption respectively, affect operations of firms in the

competitive international market. Besides, expense calculation and international pricing

approach, international regulations and laws, a structure of foreign companies, communication

Corruption refers to a manner of conduct that disrupts the trust bestowed on public

representatives or officials and undermined the foundation on which widespread relational belief

relies and upsurges entrepreneurial risks (Kyvik, Saris, Bonet, & Felício, 2013). Corruption at

the international level has both social and economic challenges on businesses and people in the

world respectively. Economically, corruption hampers economic advancement, hinders

investment, restrict, and marginalize international markets. It negatively affects financial support,

therefore, pose economic challenges on poor citizens and decreases people’s living standards,

hence social impact. Also, corruption affects nation’s economy directly through changing of

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public funds allocation, and indirectly, through shifting the prices, incentives, and opportunities

for business firms.

Global Accounting

Tax compliance continues to play a significant role in providing legal operations of

international business organizations. Accounting may pose a severe threat to multilateral

business firms which are responsible for company or corporation tax in foreign nations

(Cavusgil, Rammal, & Freeman, 2011). The transparent system of tax, compliance, and rates

requirements may cause a significant challenge to multinational companies.

International accounting approach may result in revenue maximization. Additionally, the

This paper ascertains impacts of corruption and global accounting challenges on

international businesses. Currently, financial and moral difficulties affect operations of firms in

the competitive international market. Corruption hinders economic advancement, hampers

investment, limit, and disregard intercontinental markets. It poses economic issues on poor

citizens and reduces people’s living standards. Additionally, corruption affects country’s

economy directly via transforming civic capital allocation, and indirectly, through changing the

prices, inducements, and opportunities of business firms in the international market. Tax

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compliance plays a substantial responsibility in offering authorized operations of global business

organizations. Finally, international accounting tactic may lead to revenue maximization.

Furthermore, addressing the challenge of multiple taxation layers plays a critical function in

guaranteeing favorable business environment for multilateral nations. Consequently, the

acknowledgment of tax contracts between countries contributes in preventing unnecessary dual

taxation. Besides, taxation effectiveness plays an essential function in global accounting efforts.

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Cavusgil, S. T., & Knight, G. (2015). The born global firm: An entrepreneurial and capabilities

perspective on early and rapid internationalization. Journal of International Business

Studies, 46(1), 3-16.

Cavusgil, S. T., Rammal, H., & Freeman, S. (2011). International business: the new realities.

Pearson Higher Education AU.

Harris, S., Kuivalainen, O., & Stoyanova, V. (2012). International business: New challenges,

new forms, new perspectives. Houndmills, Basingstoke, Hampshire: Palgrave Macmillan.

José, R., Esperança, J. P., & Martínez, J. I. (2011). Organizational responses to regional