The internal audit function has changed from fraud detection to assisting management in reaching decisions starting with a risk assessment. Since 1990s auditing profession has gone through a lot of change due to the growth of the economy around the world. According to Porter et al (2005), present auditing has advanced into new practices that build on a business risk viewpoint of their clients. Currently, the purpose of auditing is to give integrity to financial and non-financial material given by management in yearly reports. Also audit firms have been offering consultancy services to businesses.
Trade can help boost development in a country, and reduce poverty by generating growth through increased investment of goods from various sellers and buyers. The growth of international trade over the past several decades, and has been the main cause and effect of globalization. However trade does have its downfalls, especially when global trade relies mainly on a certain resource. In recent years China has experienced economic slowdowns along with the rest of the world. Many had worried that because of China’s position in the world market, any form of downturn would have a large global impact.
One of the factors that have most influenced the last years has been the explosion of access to information, technology development and systems of transportation and logistics management. Consequently, the physical distance between the consumer and the producer stops being a key factor in the competition between the companies. Nowadays, internationalization can be seen as an extension of the success in the domestic market and a necessity to remain competitive . Until a few years ago, many companies, especially MNCs, treated the domestic market and the international market as if they were not in the least related . We can identify three theories to approach to the transatlantic investments.
Centralised economies shifted focus to market economies and market oriented reform through world bodies like GATT, WTO, IMF and World Bank galvanised this process. Many countries have steadily reduced their tariff and other blockades whilst implement flexible financial policies (Gao). The development of the financial sector to serve the needs of international trade and investment actions has come to be the most influential aspect of economic globalisation. As the main ambassadors of globalisation, Multinational Corporations (MNC), like McDonald, Coca Cola and Levi amongst others are organising production and allocating resources worldwide with a view to maximising profit. Their global developments are altering and restructuring
Threat of new entrants Over the years, P&G has dominated the consumer goods industry in the world. However, in the recent past, there has been a notable increase in the number of investors in the industry. When these new competitors get into the market, they usually come with new technologies and that has allowed P& G to cede some market share. The thereat of substitutes; the presence of a larger pool of substitutes to the products that the company produces is a source of threat to the operations of the company. In this regard, a number of consumers are presented with an array of options from which to choose their goods.
After the Second World War, economic factors became more and more important in the world. Both developed and developing countries want to improve their economic development rapidly. After, the developed countries increase economy successfully by free trade; the developing countries started to follow their steps. From that time, global economy began to burgeon. Economic globalization provides many chance
What is globalization? It is a combination of internationalization, political and economic liberalization, and a technological revolution. Internationalization has been occurring over a long period of time as states forge more links with one another, as well as with more international institutions, to pursue mutual goals. Economic liberalization has accelerated since the 1980s as more government adopt policies which integrate their economies more closely into the world economy, often under intense pressure from bilateral donors and international institutions. Hot on the heels of economic liberalization since the end of the cold war, political liberalization and democratization have also spread, along with a new international attention to human
Globalization is the concept that describes the process of interaction and integration of people, markets, economies and governments around the world through international trade network, communication, and immigration and information technology. (Financial Times, 2016) “In the more recent past, globalization was often primarily focused on the economic side of the world, such as trade, foreign direct investment and international capital flows, more recently the term has been expanded to include a broader range of areas and activities such as culture, media, technology, socio-cultural, political, and even biological factors, e.g. climate change.” In the last three decades, the global financial market has experienced exponential growth in size; structure and sophistication, as the value of financial assets traded in these markets have grown by over 140 percent. Many countries have realized that the growth and performance of their local financial markets; which is a market that provides the platform for buyers and sellers to trade securities, currencies, bonds, derivatives and other financial assets is considered as a measure of economic growth and relevance in the international community. Therefore, over the years many countries have opened up their borders to international trade and have deregulated their financial markets to spur economic growth as these markets offer financial products that provides avenues for the efficient allocation of resources for firms, funding
Some communication and trade took place between distant civilizations even in ancient times. Global economic integration took place through trade, factor movements, and communication of economically useful knowledge and technology proving to be on a generally rising trend. • This process of globalization in the economic domain has not always proceeded smoothly neither has it always benefited all whom it has affected. Despite there being occasional interruptions, such as following the collapse of the Roman Empire or during the interwar period in this 21st century, the degree of economic integration among different societies around the world has generally been on the rise. • Indeed, during the past half century, the pace of economic globalization has been particularly rapid.
THE IMPACT OF MANAGEMENT IN THE GLOBALIZATION OF BUSINESS Globalization has had an increasing vital impact on international marketing & a major trend in business. This is nothing new. International trade has been going on since the beginning of civilization. However, in the 20th century, trade expanded rapidly due to advances in communication, transportation, and management. As the cost & complexity of operating overseas is reduced by globalization, more markets are susceptible to international organizations.