Accounting & Financial Management in the International Business





Table of Contents

Abstract3

Introduction4

Discussion5

Accounting and Financial Management Principles6

Financial Management Theory in International Business8

Risk Management in International Business9

Decision Making10

International Business Acquisitions11

Advantages for International Business11

Recommendations13

Conclusion14

References15

Abstract

Accounting and Financial management are one of the traditional functional areas of management, found in any organization, and shall be responsible analysis, decisions and actions related to the financial means to the activity of the organization around the world. Thus, the finance function integrates all tasks related to achievement, use and control of financial resources. International business is the study of the transactions that take place abroad to meet the needs of individuals and organizations. These economic activities are commercial operations, as in the case of export or import goods, direct investment of funds in international companies. Thus, all International Business transactions and dealings are done through the channels of Accounting and Financial Management. They both serve as the backbone of International Business. Therefore, this paper aims to analyze the Accounting and Financial Management in International Business and its core values and issues.

Accounting & Financial Management in the International Business

Introduction

International business is the study of the transactions that take place abroad to meet the needs of individuals and organizations. These economic activities are commercial operations, as in the case of export or import goods, direct investment of funds in international companies (Radebaugh & Gray, 1997). Thus, the study of international business mainly focuses on the activities of multinational or transnational corporations based in one country but operating in another (Daniels, et.al, 2011). These organizations represent the bulk of investment and trade worldwide. International Business is defined as any business transaction, private or government, between two or more countries. Private companies carry out such transactions for profit (Griffin & Pustay, 2010). These operations are in sales, investment and transport.

The international business comprises a large and growing portion of all businesses in the world. Today, events and global competition affect almost all businesses, large or small, because most of them sell their products to foreign countries and obtain supplies of these. A company operating internationally to participate in the way of doing business, such as export and import, which are deliver to those who usually do domestically (Eun & Resnick, 2004). The conditions of the external environment affect the way companies conduct business functions such as marketing. These are physical, social and competitive. The international operations of companies and government regulation of international business affect corporate profits, job security and wages, consumer prices and national security (Shenkar & Luo, 2008).

Discussion

In international business accounting practice was originally developed by traders and bankers: Treasury Accounting first, followed by accounts of receivables and payables. Subsequent accounting information will diversify: it is now helping economic actors (operational managers, owners of capital or other interested persons to make decisions of management), to have the best possible understanding of the inventory and consequently to make resource allocation of the entity and its results. Later, the bookkeeping becomes a legal requirement for legal, tax or ...