International Accounting Research Case

Group Members Farhan Farook Abdulla 2010034 ! Mahdi "illah 2010022 #a$ib #asrullah 2010022%2 &brahim 'ossail (al 200%14243

)u*ait is basicall+ a small countr+ *ith large amount o, *ealth and relati-el+ open econom+. /heir main source o, ,inance is ,rom "anking and )u*ait (tock &0change 1)(&2. /he re-enue o, the countr+ is relati-el+ lo*. Moreo-er3 the+ also get huge amount o, ,inance ,rom the public sector3 corporate banking3 public banking3 )u*ait Finance 'ouse 1)F'2. /he legal s+stem o, )u*ait is like other industriali4ed nation built on the constitution la*. /he state o, )u*ait ,ollo*s the ci-il la* 5urisdiction because their la* is deri-ed ,rom &g+pt la* and no* it turns in French la* s+stem. Moreo-er3 the+ also ,ollo* the Islamic (haria la* but it is not the high6class source. (o3 in order to be constitutional the la* should not be totall+ constitutional. /he count+ has regulation to protect the in-estment and because o, this reason )u*ait has a health+ economic construction appropriate ,or the in-estors. /he ta0ation s+stem in )u*ait is go-erned b+ Amiri decree number 371%88. /here is no personal income ta0 on the salaries or income ,rom the commercial acti-ities. /here is onl+ corporate income ta0 on the ,oreign companies that maneu-ers in )u*ait *ith the e0emption o, companies merged in GCC countries. )u*ait has a -er+ good political and economic relation *ith German+. German goods and products are the ,ourth most important market ,or )u*ait o, the Gul, cooperation Council 1GCC2 a,ter the 9nited Arab &mirates 19A&23 (audi Arabia and :atar. Moreo-er3 the+ ha-e good relation *ith Iran3 9(A3 Ira$3 GCC countries etc. In 5anuar+ 2014 the in,lation rate o, )u*ait *as recorded 2.%; *here as reported b+ the central bank o, )u*ait the countr+<s a-erage in,lation rate *as 3.0!; ,rom 1%%8 till 2014. It *ent until 11.!4; in the +ear 200 *hich *as the all6time high and at a lo* rate o, 61.18;. (o *e can conclude that )u*ait has a lo* in,lation. An economic gro*th o, 1.%; is ,orecasted b+ the central bank o, )u*ait. Compared to 2012 the gro*th *as !.3; and .2; pre-ious +ear. the countr+<s economic gro*th is decreasing radicall+ this is being belie-ed b+ the )u*ait<s central bank because o, reducing inputs in the oil sector *hich e-entuall+ results in lo*er output. As a result )u*ait<s economic gro*th is lo* in the current period /he education le-el o, )u*ait id increasing graduall+ as da+s are passing almost 30; o, the entire population are student *ho are enrolled in )u*aiti schools i.e. go-ernmental school and more o, *hich get themsel-es admitted in the pri-ate institutions as the+ need ,or more ,re$uenc+ in &nglish language. =ooking to this clearl+ noti,ies that the education le-el o, )u*ait is high.

/he main source o, ,inancing in (outh A,rica is "anking (+stem. /he (outh A,rican banking s+stem is *ell de-eloped and e,,icientl+ planned3 including a central bank and also some large banks and a number o, smaller banks that ,inanciall+ strong banks and in-estment organi4ations. /he ,inancial ser-ices part is supported b+ a sound regulator+ and legal ,rame*ork. /he boast,ul do4ens o, local and e0ternal organi4ations pro-ide a ,ull range o, ,acilities > commercial3 marketing3 insurance and in-estment. /he most competiti-e in the industr+ is sta+ing *ith the in-estment and commercial banking3 *hile the countr+?s @big ,i-e@ banks > Absa3 F#"3 (tandard "ank3 #edbank and ne*comer Capitec > control the marketing. (outh A,rica?s legal s+stem is created on Roman6Autch la*3 so because o, that<s *h+ it is not a Bur+ s+stem. /he Constitutional Court is the topmost court in the (outh A,rica and created a,ter the countr+?s ,irst democratic elections in 1%%4. It placed in 5ohannesburg and it runs b+ more than 11 Budges. "eing the highest court in the countr+3 no other court can o-erturn these decisions. 5udgements linking to the Constitution ,rom the 'igh Court can be taken to the Constitutional Court. (outh A,rica<s in,lation rate is raise to 8. ; in 5anuar+ and it enhanced to 8.% ; in Februar+ because o, rising o, ,uel costs. Crices increased 1.1; in the month. /he rand ,all 22 ; in contradiction o, the dollar last +ear3 and a more than 8.D; in 5anuar+3 *hich increased the cost o, imports and pro-oked the Reser-e "ank to increase its benchmark repurchase rate b+ hal, a percentage point to 8.8; on 5an. 2%. /he rand added 3.% ; compared to the dollar in the ,irst o, Februar+. /he (tatistics (outh A,rica is in,orming the in,lation rate in (A. /he a-erage rate o, in,lation in (outh A,rica ,rom 1%! to 2014 is a-eraged %.4!;3 the highest rate o, in,lation *as 20.%0 ; in 5anuar+ 1% ! and a lo*est o, 0.20 ; in 5anuar+ 2004. 'ousing and 9tilities 124.8 ; o, total *eight23 /ransport 11!.4 ; o, total *eight2 and Food and #on6Alcoholic "e-erages 118.4 ; o, total *eight2 are the most important t+pes in the identi,+ing consumer price in (outh A,rica. /he ta0ation in (outh A,rica based on 2 le-els o, go-ernment 1central and local2. /he central go-ernment incomes come mainl+ ,rom income ta03 ,uel dut+ and companies. /he local go-ernment incomes come ,rom grants ,rom central go-ernment assets and local rates. (outh A,rica has a strong and controlled ta0ation go-ernment that ,ounded on international best practice. /he (outh A,rican Re-enue (er-ice manages the ta0 go-ernment. Income ta0 is the main source o, ta0ation re-enue in (outh A,rica. =ocal companies are ta0ed at a ,i0ed rate o, 2 ;3 so each compan+ is ta0ed as a separate ta0pa+er. In 1%2% the 9nited (tates constituted political relations *ith (outh A,rica3 ,ollo*ing the 9nited )ingdom?s recognition o, (outh A,rica?s local and outdoor autonom+ *ithin the "ritish )ingdom. /he relations bet*een 9.( and (outh A,rica ,rom 1%D0 to 1%%0 *ere e0tremel+ a,,ected b+ (outh A,rica?s ethnic policies. /he economic relation o, (outh A,rica and the &9 and its partners in the de-eloping *orld are more and more concentrated on help ,or trade as a basis to more e,,ectuall+ attain Aoha Ae-elopment Agenda targets. &conomic collaboration3 dri-en b+ (outh A,rica<s must ,or emplo+ment creation3 takes place in e-er6increasing areas bet*een the t*o partners and includes skill de-elopment3 in-estment promotion and protection3 industr+3 transport3 agriculture3 tourism and other ser-ices. All (outh A,ricans ha-e the right to a basic education3 including adult basic education and additional education. According to the "ill o, Rights o, the countr+?s Constitution3 the state has a responsibilit+ to make this education a-ailable and accessible into suitable measures.. At about D; o, gross local product 1GAC2 and 20; o, total go-ernment e0penses3 the go-ernment spends more on education than on an+ other sector.

Malaysia is a countr+ *hich has strong emerging market and the+ are leading top in the *orld *ith their -aried3 e0port6dri-en econom+. Mala+sia is able to keep their real GAC constantl+ strong b+ under controlling their in,lation and unemplo+ment. In the past the main source o, ,inancing ,or economic acti-ities in Mala+sia *as banking institution and still it is one o, the main sources o, ,unding. Moreo-er3 the emerging market3 stock e0change also pla+s a -ital role in distribution o, ,unds. /he ,inancing option includes schemes capital ,unds3 pri-ate and public placement debt securities3 ,inance leases3 ,actoring3 de-elopment1 ,inance and Go-ernment1 de-elopment grants. Mala+sia is basicall+ based on the mi0ed legal s+stem. /heir la* s+stem ascends ,rom three maBor phases in Mala+sian histor+ starting ,rom Malacca (ultanate3 Islamic la* and the Common la*. /he la*s3 *hich are ,ollo*ed b+ Mala+sians3 are common la*3 state la*s3 secular la*s ,or criminal and ci-il and sharia or Islamic la*s. Accounting standards ha-e become a la* ,or the countr+. MA(" 1Mala+sian Accounting (tandard "oard2 made accounting standards *hich should be ,ollo*ed b+ the all the companies in Mala+sia. /he legal s+stems o, Mala+sia are categori4ed into t*o classes3 Eritten and 9n*ritten la*. /he ta0ation s+stem in Mala+sia is separated. /he+ maneu-er under a (el,6 Assessment (+stem 1(A(2 and income is ta0ed on a pro-incial basis. Man+ t+pes o, ta0 in-ol-ed in the ta0ation s+stem in Mala+sia ,or e0ample3 corporate ta03 Income ta03 Real Cropert+ ta0 etc. Mala+sia pla+s -ital character in the &9<s e0ertions to reach out to the entire *orld *ith the help o, emerging econom+ o, 2%.3 million o, di-ersi,ied people. In the +ear 2010 Mala+sia and &9 sprang t*o main initiati-es *hich are Free trade Agreement 1F/A2 and Cartnership and cooperation Agreement 1CCA2. In order to increase the trade and other bene,its Mala+sia keeps good relation *ith china3 Indonesia3 9(A etc. At present the Mala+sian in,lation rate is 3.80 *hich are higher than the last +ear and it is getting higher so3 the go-ernment should look at this point. Aue to e0cessi-e gro*th o, the mone+ suppl+ the countries in,lation goes high. Moreo-er3 there are some other ,actors *hich also turn the in,lation rate high. Mala+sia is a de-eloping countr+ in Asia and in the recent +ear has producti-el+ distorted ,rom an e0port o, ra* material into a di-ersi,ied econom+. Mala+sian Gross Aomestic Croduct 1GAC2 is e0panded 8.10 percent in 2013 and *hich is good. /here maBor sector o, the econom+ is ser-ices3 accounting ,or around 84; o, GAC. In the manu,acturing section is currentl+ increasing to 28;. /he education le-el o, Mala+sia is relati-el+ high. /he )ementerian Cendidikan Mala+sia 1)CM23 *hich is the Ministr+ o, &ducation 1MF&23 looks all the ,actors o, the education le-el o, Mala+sia. /he main responsibilit+ o, the Mala+sian education ministr+ is to pro-ide good education to all.

Spain has been a maBor pla+er in the *orld econom+ ,rom 18th centur+. (ince then it has a strong in,luence in the &uropean econom+. /he econom+ o, (pain is considered as mi0ed capitalist and is the ,i,th largest econom+ in the &uropean 9nion. /he countr+ has annual nominal GAC o, 1.34% trillion making it the thirteenth largest econom+ in the *orld. 'o*e-er3 (pain<s econom+ *as hea-il+ a,,ected during the global ,inancial crisis in 200 . /he countries unemplo+ment rate and in,lation rates increased highl+. /he main sectors contributing to the (panish econom+ include tourism3 ,ood and agricultural productions3 ,inancial ser-ices and manu,acturing chemicals and petroleum products. /he (panish legal s+stem is ci-il based *hich is rooted in Roman la*s. /he s+stem imposes man+ legal codes and la*s. In the &arl+ da+s3 (panish businesses hugel+ relied on French #apoleonic Code o, 1 0D./he ,irst ,ormal instructions ,or accounting *as introduced in 1 2% in the ,irst (panish commercial code. /he code included detailed instruction on the book keeping in the business organi4ations. /he instructions *ere more concerned about internal book keeping rather than ,inancial reporting ,or the public. It *as onl+ in the late 1%D0 the (panish go-ernment implemented la*s regarding balance sheets and income statements ,or companies. /he ,ormation o, the current accounting s+stem that includes accounting principles and standards took place a,ter the Boining o, (pain in the &uropean 9nion in the +ear 1% !. Follo*ing the Boining (pain *as compelled to ,ollo* the &9 directi-es on auditing and accounting and according to this3 the go-ernment introduced an auditing la* in 1% and also issued a ne* compan+ la* in 1% %./he Instituto de Censores 5urados de Cuentas 1IC5C&2 *hich represents spain in the International Accounting (tandards Committee and /he Registro de &conomistas Auditores 1R&A2 are t*o main independent bodies ,or auditors in (pain. /o summari4e3 although the go-ernments3 &uropean 9nion and International Accounting (tandards Committee ha-e in,luenced the (pain<s accounting greatl+ there are signi,icant -ariations in accounting s+stems bet*een countries in this region. /hese -ariations can be Busti,ied b+ the cultural di,,erences and historical background o, the countr+.

Table
Development Factor Main Source of finance Legal System Malaysia Banks, Stock Exchange Mi0ed legal s+stem1Common la*3 Islamic la*2 Separate Kuwait Banks Civil Law South Africa Banking System Common law Spain Banks Civil Law

Taxation

Political an economic ties !nflation Level of economic evelopment " ucation Level

&93 China3 Indonesia3 9(A $igh $igh $igh

Tax Free(Except Foreign companies) S !CC Low Low $igh

Linked

Separate

S, " Low $igh $igh

E#rope $igh $igh $igh

Reference:
(pain Facts and 'istor+ in "rei,6 Retrie-ed ,rom httpG77er*in.bernhardt.net.n47europe7spain,acts.html International accounting harmoni4ation 6 a comparison o, (pain3 (*eden and Austria6 5ohn "lake Political & economic relations. 1n.d.2. Retrie-ed ,rom httpG77eeas.europa.eu7delegations7mala+sia7euHmala+sia7politicalHrelations7inde0Hen.htm 1n.d.2. /RAAI#G &CF#FMIC(. 1n.d.2. Malaysia inflation rate. Retrie-ed ,rom httpG77***.tradingeconomics.com7mala+sia7in,lation6cpi (C(G Cro,essional and "usiness Ad-isers. 1n.d.2. Sources of finance . Retrie-ed ,rom httpG77***.scsg.com.m+7html7ser-icesHin-estmentHad-isor+8.htm A l t e rnative modes of financing. 1n.d.2. Retrie-ed ,rom httpG77***.bnm.go-.m+7inde0.phpIrpJ1 Legal system of malaysia. 1n.d.2. Retrie-ed ,rom httpG77***.la*teacher.net7,ree6la*6essa+s72626essa+s7legal6s+stem6o,6mala+sia.php
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http://www.southafrica.info/business/economy/sectors/financial.htm#.UzAgZvmSy8A http://globaledge.msu.edu/countries/south africa/economy http://eeas.europa.eu/delegations/south!africa/eu!south!africa/political!relations/in de"!en.htm