Question

Why have international financial markets grown so rapidly in the past decade? Is this rate of growth likely to continue? What changes do you see in the international financial markets in the coming decade? Consider the influences of both developed and emerging countries.

Do you think all firms, in all economic environments should operate under the same set of accounting principles? Elaborate. Support your answer with facts/reasoning.

Answer 1

From the past decade, the relations between the developed and emerging countries had been on growth trend. Talking in terms of economic, technology or any trade deals, there is flawless exchanges had been done with each of the countries. This benefitted to each country in terms of growth in economic aspects in the country.

Considering international financial market, countries had allowed to invest in one another countries companies across globe through various means and modes. This provides international financial market more flexibility, volatility, transparency among each other. All the developed countries had started investing in emerging countries to benefit both the economy. Each countries had its own unique strength which then if shared with countries in exchange of their strength considering both the transaction separate, it necessitate the building of strong international financial market to provide trust on each other as well as smooth functioning of the trade transactions and deals.

Amid if any political or national security tensions does not arise between these countries, this rate of growth will likely to continue increase in future also.

In the coming year, international financial markets would seen stronger growth through Fintech improvement. Fast and easy access to investing in international markets with minimum adequate compliances would be developed.

To an extent it is possible for all the firms, in all economic environments should operate under same set of accounting principles. But obvious reasons are firms will able to compare its financial and ability at global level and sought clarity of competition and opportunities of explore and growth. This will also led to more transparency to the stakeholders. Though it would be difficult to implement the same accounting principles across the globe as the economic scenarios would be different. However, exceptions would be provided for such different economic scenarios. This would led to not same accounting principle but will be closer to the global level without compromising national level scenarios. For eg. IFRS is most acceptable accounting principles across the globe. India under its economic scenario had implemented Ind AS which is converged version of IFRS, a combination of that comply with both national and global standards and scenarios.