Organizations Law Business and Trade Activities

Question: Discuss about the Organizations Law for Business and Trade Activities. Answer: Introduction With the growth of the business and trade activities within the society the necessity of the appropriate governess for the business activities and the business organization was felt by the governments across the world. Moreover, for this reason several governments of different countries introduced corporation governance rules and Acts in order to govern the business activities performed by the business entities within the specific nation (Hansmann Kraakman, 2000). Afterwards, the rules, regulations, and Act related to the corporate governance has been changed and amended as per the needs from time to time. Global Financial Crisis was one of the most significant event for the world that forces the economist, academic scholars and the head of the nations to think about the monetary policies of the nations and to revaluate the policies and refurnished the policies as per the new situations need and demand. In Australia the corporate and business entities are governed by the Corporate A ct 2001. `The Act provides requisite rules and regulations in order to govern and control the huge number of business organizations within the country (Hilb, 2005). In Australia the important accounting tasks are performed according the standards provided by Australian Accounting Standard Board (AASB), however, in the changing business circumstances the necessity of requisite amendment to the accounting standards and financial reporting standard has been immensely felt. Moreover, the accounting tasks and the requisite accounting standard are vital for the companies and play vital role in the governance of the organization (Kim Nofsinger, 2007). This paper is on the accounting standard followed by the Australian companies and their competences with the international standard. Main body Corporate governance has drawn attention from the entire academic scholars, researchers, economist, and policy makers across the globe when the big organizations like UKs Enron and USAs WorldCom has been collapsed in 2001 and 2002 consecutively. Moreover, from then the researchers and economist across the globe provide great attention in developing more efficient corporate governance policies and the various nations are applying the new rules and policies in order to improve the governance and control within the business organizations around the nations (Kimmel, Weygandt, Kieso, 2010). The nation all across the world are trying to set efficient practices as a guidelines for their corporate governance. The economists and researchers all across the world are trying to explore several new perspectives in the field of corporate governance and the authorities are trying to apply various rules and regulation in order to overcome the significant issue. There are several different reports p roduces by organizations such as Cadbury Report in United Kingdom, Sarbanes Oxley in USA, The Day Report in Canada provide important guidelines and principles on the corporate governance (Lehman, Tinker, Merino, Neimark, 2005). The aim of maximum numbers of rules and regulations is to enhance the corporate governance environment of the organizations. In Australia the ASX Corporate Governance Councils provide the essential principles, guidelines and recommendations for the he companies performing business activities in this country for effective corporate governance within the organization. Good corporate governance can be referred to the corporate establishments, which leads to optimize the value of the entire stakeholders of the organization and it should be legally, ethically as sustainably competent (Mallin, 2004). Moreover, it should ensure equity as well as transparency to each stakeholders of the company including the employees, customers, suppliers, vendors, the government as well as the society. Therefore, in current business context the corporate governance is becoming the determinant factors to several matters in detecting the organizations strength and functionalities. One of the most vital functions of corporate governance is the accounting standard and financial reporting standard of the organization. In Australia the Australian Accounting Standard Board (AASB) is responsible to provide the essential accounting standards to the business organizations perform their business activities within this country (Reckers, 2001). The structure and practice of corporate governance play vital role in deciding the cost of the capital in the international capital market. The Australian business organizations should be equipped in order to compete internationally as well as to maintain and encourage the investors in Australia as well as in overseas. The corporate governance policies should be maintained strictly in order to promote high standards, values and transparency about the practices of corporate governance policies adopted by the companies. The ASX Corporate Governance council has amended the Principles 6 and 8 in order to make it apparent that a listed company is not need to comply with the Section 250RA and 300A of the Corporations Act, AASB 124. The boards of directors are mainly responsible for the external financial reporting function of the business organizations. The chief executive officer of the company along with the chief financial officer play crucial role in preparation of the financial report of the business organization and the boards has high degree of confidence and trust on them for integrity as well as disseminate of the accounting information of the organization (Steane Christie, 2001). They keep an eye on the internal accounting system of the orga nization and are reliant on the accountant of the organization as well as the chief executive officer and chief financial officer dependent on the internal auditors of the organization. The present accounting rules in Australia permit the managers little selection in order to determine the methods of measurement and condition to recognize several different financial reporting elements. Frauds in financial reporting inclusive of non-disclosure as well as deliberate falsification of the values provide significant information risk to the users of the financial reports (Weygandt, Kimmel, Kieso, 2014). For many reasons the AASB is going to implement the standards of the International Accounting Standard Board (IASB) and adopt the International Financial Reporting Standards (IFRS) in order to comply with the international standard and improve the acceptance of the Australian companies all across the world so that the investors take interest on the Australian company and make considerable investment in the Australian company. Conclusion Corporate governance is one of the most crucial aspect of the organizations and it play vital role in the effective operation of the organization as well as it helps in further growth and development plan of the organization. Accounting is one of the key elements of corporate governance and providing effective mechanism and accounting standard the organizations can improve its standard and reputation in the industry. Like other developed countries Australia is also great emphasis on developing effective corporate governance policies in order to compete with the international standard so that improve the reliance and trustworthy of the organizations in Australia (Wink Corradino, 2011). In this matter, the government has taken several effective steps such as the Australian Accounting Standard Board (AASB) has adopted several standards, rules and regulation from the International Accounting Standard Board (IASB) as well as adopted the International Financial Reporting Standards (IFRS) in order to prepare the financial reports of the Australian organization so that the Australian organization can compete internationally. References Hansmann, H. Kraakman, R. (2000).The essential role of organizational law. 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