Mod 2 Critical Thinking

Over the past decade a business has continued to be more globalized, the needs to communicate across the borders has correspondingly increased with the increase in global trade hence there is a globalization of capital markets. Company in one country is borrowing the capital market of another country. Therefore the financial statements produced in one country used in another country more and more frequently. This has raised issue of harmonization of accounting policies, presentation, disclosure etc. Investors would like to direct their capital to the most efficient and productive companies globally and to understand their financial reports and further rational behind the harmonization is that it will enhance comparability of financial statements which will make them easier to use across the border. The mandatory disclosures and valuation which are mandatory for financial statements are according to Generally Accepted Accounting Principles (GAAP) and International Financial Reporting System (IFRS). Literature Review To predict and estimate future growth progress of the firm on the long and short term expenses, sales etc. the process of financial planning is very important. All the financial planning and the strategies to manage finances are devised by the financial manager. Finance manager ascertain several costs of the functioning