Islamic Corporate Governance and Financial Products in Australia


Added on  2019-09-30

8 Pages2262 Words487 Views
Running head: FINANCIAL ACCOUNTING ISSUESFinancial Accounting IssuesStudent Name:Course work:University

FINANCIAL ACCOUNTING ISSUES1IntroductionIn this present paper we will discuss the literature review of corporate governance model, Islamiccorporate governance and role of the sharia committee. The purpose of the paper is to analyze the Islamic corporate governance in Australia and Islamic financial products in Australia and on the basis of analysis the conclusion and recommendations are made. The corporate governance model is very significant to improve the value of the firm in the Australian financial market. The qualitative research method is used for analyzing the Islamic corporate governance and Islamic financial product in Australia with secondary data. The major limitation of the study is that the study is not analyzing the difference in Islamic and non-Islamic financial products in Australia. The research area in finance is focusing on corporate governance. Literature reviewCorporate Governance ModelsThe corporate governance is defined as the process through which corporations are directed and controlled. The structures describe the roles and responsibilities of each and individual in the corporation. The core agency problem facing by the firm include separation of ownership from control. The importance of corporate governance was arrived after the separation of managementand ownership control in the corporation. The reason of raising agent problem is due to conflict between the interest of shareholders and management. The Anglo-US model is characterized by share ownership of individual, increasing institutional, investors who are not affiliated with the investors. The framework describes the roles and responsibilities of three major players of an organization, namely, management, shareholders and directors. The other players include

FINANCIAL ACCOUNTING ISSUES2government agencies, self-regulatory companies, consulting companies, and stock exchanges. The model is created within the context of free market economy, by assuming the separation of ownership and control in publicly-held companies (Hassan et al., 2014). The Japanese model is characterized by the ownership of high level of stock by affiliated banks and organizations. The equity financing plays an important role in Japanese companies. They play an important role insider corporation and a whole system. The German model is mainly applied to German and Australian companies. The model has three unique characteristics, namely, two models pertain toboard composition and one concern shareholders rights. Firstly, the model has separated into management and supervisory board. The two boards are distinguished, no one simultaneously serve on the management and supervisory board. The size is defined by the law not by the shareholders. The major players are German banks, and corporate shareholders. The model has included employee representative on German supervisory board. Islamic Corporate Governance & Role of Shariah CommitteeThe Islamic finance is having 1% of share in the global market. The Islamic financial system has string and effective framework which shows improved performance of the system. The Islamic finance is benefiting from its structural and cyclical drivers. The GCC accompanied by the surge in Islamic finance and EMEs has grown from 15% to 20% in the past four years . The corporate governance provides rules and regulations which ensures good practices guide for the management of the institution. The structure of a company and the incentive system address print-agent issues which ensure that the executive management serves long-term benefits to the shareholders and the management of the company. The OECD principles of corporate governance include the endurance for an effective corporate governance framework, rights of shareholders and key ownership functions, equitable treatment of shareholders, role of

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