Effects of Corruption and global Accounting on International Business

Effects of Corruption and global Accounting on International Business
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
barriers and cultural diversity. Political issues, global environmental challenges, selecting the
appropriate international shipment procedures, universal compensation method, complexity and
dangers associated with workforce exploitation, and currency rates problems affect worldwide
business operations (Cavusgil & Knight, 2015). Therefore, this paper seeks to ascertain impacts
of corruption and global accounting challenges on international businesses.
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
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
registered location of a business firm may result in organizational tax liability. Addressing the
challenge of multiple taxation layers continues to play a crucial function in ensuring a favourable
business environment for companies operating in foreign nations (José, Esperança, & Martínez,
2011). Consequently, the recognition of tax agreements between countries assists in averting
additional double compensation or taxation. Moreover, taxation efficiency plays a vital function
in international or global accounting efforts.
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
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.
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
integration among MNEs in Latin America. Management International Review, 51(2),
Kyvik, O., Saris, W., Bonet, E., & Felício, J. A. (2013). The internationalization of small firms:
The relationship between the global mindset and firms’ internationalization
behavior. Journal of International Entrepreneurship, 11(2), 172-195.

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