Exploring Current Issues In Accounting And Financial Management Essay.

The first topic: Challenges in Myer's Marketing and Fiscal Management

1.The CEO has forwarded to you an interesting article and requires you to provide her with a deeper theoretical understanding of the issues discussed so that she can fully engage in the lively discourse at an upcoming conference. 

You are required to find a newspaper article or web page report of an item of accounting news, i.e. it refers to a current event, consideration, comment or decision that has been published after the 1st of June 2018. Your article could also come from one of the professional journals. The article should not come from an academic journal. Academic journals generally do not contain news articles or articles of less than one page and are usually only published 2 or 4 times a year. Your article should also relate to a different issue to what you will be investigating in Question 2 (in other words, don't use an article about the exposure draft you will be using in question 2). If you are having a problem ensuring that your article is from an appropriate source contact your subject coordinator.

You then need to explain the article that you have found in your own words and clearly relate the concepts, ideas and facts within the article to one or more of the theories or topics that you have studied this session. Support your analysis of the assumptions and implications of the topic or theory as appropriate with reference to sources in APA 6 style. For example, this article from the Sydney Morning Herald in April 2016 could be linked to the topics of accounting regulation and measurement (and perhaps others). You must provide a copy of the article or web page, with details of the source, date and page number with your answer.

2.The Senior Partner of the firm you work for has appointed you to a new role. It is now your responsibility to review upcoming accounting standards and provide a report to the partners on the proposed standard and the opinions of other industry players on the changes. 

Firstly, you are required to find a current exposure draft or proposal for a new accounting standard which has been opened for public comments. (These can be found on the websites of most standard-setting organisations, such as the IASB, AASB and FASB. Hint: These websites can be quite difficult to navigate, so as a first step try typing “IASB exposure draft and comment letters”/”FASB exposure draft and comment letters” into Google or other search engine of your choice). Read a sample of the comments from a range of respondents. Select four respondents, ideally from different types of organisations for example, from accounting bodies, industry, companies or corporate bodies. If you are having a problem finding suitable comments letters then contact your subject coordinator. 

1.According to the article by Elizabeth Knight, Myer’s is trying to incorporate a new way in the marketing of its products to ensure that it remains productive. In the business sector there are large budgetary plans that are set year after year with the aims of increasing sales and getting new customers. According to Elizabeth Knight plans need appropriate strategies in the implementation with good and strong fiscal management team that ensure that all expenditure are within the budget limits to avoid going beyond or under the budget (Knight, 2018). In this piece of work there will be an in-depth focus of the existing marketing and Fiscal Management in Myer. Also the transparency issue in the delivery companies’ promise and management will be given a look into reasoning on the challenges that are encountered in trial to regain shareholders trust and how the various challenges are handled and suggest better ways to face the challenges through discounting strategy.

The Myer’s CEO perform obligations of administering marketing making spending plans and get ready reports, explanations, and conjectures identified with the business sector marketing plans. All this are roles and responsibilities of the key stakeholders in the financial management and the profit realization implementation process. It doesn’t mean that with all the duties and responsibilities state, all the expected returns will be arrived at with ease and their disclosure being the best when it comes the knowledge of all that is happening. There are drawbacks that are experienced due to the fact that this is a team and not all the individual who have the same marketing capabilities and the objectives towards the activities of the company aiming to do the duties without violating the transparency rule. The various challenges are encountered in the process but not all are addressed since they happen in a way that is not widely clear to the CEO and the marketing team. Therefore, there found the need to get deep in the understanding of this various and unrevealed transparency challenges to enlighten the marketing department and also come up with suggestions that can be very vital to act as remedies to the transparency challenges acting as guideline for effective and improved operations and performances of CEO which will be through discount application due to the loss accrued in 2018. 

There are many researchers who have ventured in understanding the monetary related issues in the public establishments. Various research publications have precisely given analysed information in regard to the budgetary and fiscal management in public offices. Health sector is not left out. In many nations there the responsibilities of budgetary and fiscal management department are well defined with rules and policies associated with the systems listed.

The second topic: AASB's Proposed Standard for International Direct Investment (FDI) and Its Impact on Developing Countries

The acceptance of products many at times dictates the expenditure and profits realized which in many cases tries to cover transactions in the favour of the involved shareholders which is considered a public theory. Apart from the acceptance, the organization is prone to policies that are directly linked to the service provision to the customers. A lot of the expenditures in the organization are associated with management facilitation that involves purchases extending to the levels of importation thus being affected by the monetary policies and also acts as an avenue for managers to seek benefits from the transactions. Whenever there financial instability in an organization, not even a single budget allocations are spared because there are variations in the product and services prices which in many occasions is not captured in the governance posing a challenge to the fiscal management and budget implementers as they seek to find an equilibrium status for the operations and expenditures. These has been a venue that has not been identified as way of enhancing transparency because there is no constant way that the managers can link to certain prices thus taking advantage leading to additional cost.

Theories applied

Social Theory

Charismatic management according to Elizabeth Knight is considered to be a double edged sword which requires continuous monitoring for the purpose of averting abuse of power. The reason for this is that it can lead to both negative and positive outcomes. The other possible reason which calls for continuous monitoring is that the charismatic power can lead to people making diluted choices as a result of charm and judgements made based on emotional feeling. People may not be rational when they are faced with emotions and charm of the charismatic leader which can be the wrong decision taken. In spite of the great set down jobs and obligations of the CEO in the promoting of Myer, monetary jobs execution do experience through advancement in preliminary of thinking of more viable administration which is straightforward. Misfortune making challenges are a moving back viewpoint in the organization which originates from inside the association or from outside powers.

Critical Theory

The meaning of double edged is that it can lead to decisions which are positive while others may be negative. Thus the need for continuous monitoring of the decisions made. The quality of being competent for the charismatic leaders usually may be exaggerated which may lead to the wrong choice on the part of the followers and the organization as a whole. Thus the addictive qualities of the charismatic leader may lead to the company falling into some pitfalls which could otherwise be avoided. This is because the moment followers become addicted to the leader, they may not think much when the leader makes a certain choice. They will definitely follow it without the second thought and thus causing the challenge if the choice made was erroneous.

2.On 7^th of Aug, 2018, AASB proposed a standard targeting International Direct Investment. According to AASB, the trade patterns have drastically changed to adapt to the fast population growth and technological revolution. Evidently, there is rapid growth and changes in the global investment patterns and the business transactions between different nations around the world. The most common form of investment used by the developed countries is the foreign direct investment (FDI). Investors from these countries purchase and establish income generating assets in the developing nations and control all the operations of the investment. Scholars define foreign direct investment as the investment from one nation to another that entails the acquiring of tangible assets and establishing business operations. This means that FDI may take many forms such as constructing a facility, investing in a joint venture or direct acquisition of a foreign firm. Many people confuse between FDI and portfolio foreign investment. Portfolio foreign investment is the process by which a nation purchases another country's securities. The main difference between the two is that FDI has the element of control while portfolio foreign investment lacks this control element. FDI exists in three types namely horizontal, vertical and conglomerate. The diversity in the types of FDI is determined by the similarities and differences evident in the business between the different countries.

One of the issues raised in the letter for comments is the relationship between rapid growth and FDI. The rapid growth in the number of FDI in the developing countries has led to significant impacts on the locals of these countries. FDI is associated with crucial developments that boost the country's economy and support the construction of new infrastructure like roads. Furthermore, foreign direct investments help the local families by providing employment and other critical social amenities to them. The local citizens of the developing countries also benefit from the transfer of soft skills as the foreign investments offer training and job creation to access more technology and development resources. In many instances, FDI benefits the local population of the foreign countries, but recent studies show that the locals also face some drawbacks as a result of the international investors. Some of these adverse effects include environmental pollution by the international industries, exploitation of young workers and political influence. The FDI also tend to play an essential role in altering the political configurations of these developing countries (Hilson 2012). 

Another issue of concern associated with International Investment proposal is the Economic development. Economic development stimulation is one of the significant benefits that developing countries enjoy due to the foreign direct investment by multinational corporations. To start with, the MNC stimulates the developing county's economic development by enhancing a healthy and conducive environment for other local and foreign investors to exploit. The fact that, FDI requires multinational funding and expertise means that the host country will benefit from the private investment in infrastructure, energy, and water. FDI brings about the creation of competitive advantage among the businesses in the nation reducing the effect of politics and corruption in the developing countries (Moran 2014). At long last, the competitive advantage results in a massive rise in the country's economy. Another advantage of FDI in boosting the economies of these countries is that it offsets the volatility created by "hot money." This is the creation of asset bubble by money lenders and currency traders as they invest millions of money and then sell all their investment within a concise period. FDI also creates a diverse market for the products produced locally and those imported. As a result, the rate of business transactions within these countries increases and consequently their economies are also positively impacted (Hilson 2012).

Thirdly, the comment letters have raised the Issue of effect of International investment in relation to the effect to the local population. The local populations also enjoy some benefits from the foreign direct investment. Families in the developed countries have evidently benefited from the activities of various MNC in their countries. First, foreign direct investment has raised the living standards of these families. One of the significant problems facing families in the developing nations is unemployment. According to statistics, almost 70% of the African population is unemployed. The FDI employ the locals to work in their plants as managers, supervisors, advisors and manual workers. As a result, families can meet their basic needs of food, shelter, clothing, education, and health. The MNC also provide some social amenities such as hospitals and water plants to the families. An excellent example is the Coca-Cola Company that runs programs of donating water to the drought-stricken areas in the Central Africa Republic. The company, in collaboration with other companies, also supports various health programs in the country (Idemudia 2011). The multinational corporations have also supported the education sector of these developing countries which in return reflects the success of the local families in future. They facilitate the education of young children and teenagers through different actions such as sponsoring bright students further their studies abroad, constructing relevant resources such as libraries and educating the locals on the importance of education. For example, Toshiba and Microsoft have donated computers to some of the schools in India to ensure that the students are computer literate (Moran 2014). 

Every MNC affects these nations differently and to varying degrees. To start with, the multi-national corporations sometimes take advantage of the lower standards of the host country. They do this through some aspects such a workforce and resource exploitation. For instance, an American multi-national corporation can invest in a company in Brazil due to the country's lower costs of workforce and resources. The company can then bring home new products at lower prices and spark stiff competition among the local businesses. The FDI can also exploit the resources in the developing countries without paying back enough revenue in exchange. This is clear in the mining industries where foreign investors have been known to utilize the mineral resources in the third world countries. For instance, The United States has been accused on many occasions for exploiting petroleum and other oil products without benefiting the host country. Another aspect by which the FDI takes advantage of the host country is by introducing new products with new low prices. This affects the county's local industries since most of the citizens will opt to buy the cheap products (Moran 2014).

Theories

Public Theory: The high rates of unemployment in the developing countries tend to lure the FDI to exploit the young workers. The foreign direct investors know that some of the developing countries have a very high population that is living below the living standards and tend to use these facts to exploit them especially the youth. There are different forms of exploitations that the citizens of the host country face such as low salaries and wages. The FDI fails to meet the wage standards since the many young men and women do not have other job choices to consider. The companies also do not meet the health requirements of their working environments. Workers are exploited by working under hazardous environments that sometimes affect their health conditions. The young workers are not provided with the necessary equipment such as gloves, gas masks and aprons. The workers also have to work for long hours to make enough cash to meet their financial needs. For example, the Apple's companies in China have been known to provide poor working conditions to the Chinese youths (Idemudia 2011).

Private Theory: The multi-national corporations play a significant role in the political influence of the developing countries. Several cases have been heard throughout Africa about how the MNC fund famous politicians in their campaigns. The multi-national corporations tend to financially support the politicians with manifestos that will favor them and increase their profits. For instance, MNC can endorse a presidential candidate whose manifesto is to reduce the taxes charged to foreign investors to reduce their expenses (E Ite 2004). Also, the international investors indirectly advocate for leaders who promise to give governments tenders to their organizations. In fact, many investors in the developing countries are worried about the modern-day Economic colonialism where many government tenders are being given to the FDI rather than the local businesses (Idemudia 2011). 

In conclusion, the foreign direct investment by multi-national corporations can be very advantageous to the developing countries. It can enable them to jump to new levels of success by boosting their economy through the various methods discussed in this paper. Foreign companies can be extremely rewarding and can significantly benefit the third world countries through the creation of employment, enhancing social amenities and raising the living standards of the local families. However, foreign direct investments bring about several risks, and it is fundamentally essential for any country to evaluate the challenges it will face as a result of the MNC. Disadvantages such as hindrance to domestic investment, political changes, negative influence exchange rates and economic non-viability are likely to be experienced.  Also, it is crucial for the developing countries to form a parliamentary committee which will be accustomed to working with the multi-national corporations to benefit the nation. We are living in an increasingly globalized economy, and Multi-national corporations will continue to undertake foreign direct investment in the developing countries. The best thing to do is to weigh the advantages and disadvantage to know the cause to take. 

References

E Ite, U. (2004). Multinationals and corporate social responsibility in developing countries: a case study of Nigeria. Corporate Social Responsibility and Environmental Management, 11(1), 1-11.

Knight, E. (2018, September 12). Done with discounting: New Myer CEO tries his predecessor's old trick. Retrieved from https://www.smh.com.au/business/companies/done-with-discounting-new-myer-ceo-tries-his-predecessor-s-old-trick-20180912-p503ao.html?crpt=index

Hilson, G. (2012). Corporate Social Responsibility in the extractive industries: Experiences from developing countries. Resources Policy, 37(2), 131-137.

Idemudia, U. (2011). Corporate social responsibility and developing countries: moving the critical CSR research agenda in Africa forward. Progress in Development Studies, 11(1),

Moran, T. (2012). Foreign direct investment. The Wiley-Blackwell Encyclopedia of Globalization.

Moran, T.H. (2014). Multinational corporations and the politics of dependence: Copper in Chile. Princeton University Press.