FINANCIAL ACCOUNTING ISSUES.
Added on - 30 Sep 2019
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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 analyzethe Islamic corporate governance in Australia and Islamic financial products in Australia and onthe basis of analysis the conclusion and recommendations are made. The corporate governancemodel is very significant to improve the value of the firm in the Australian financial market. Thequalitative research method is used for analyzing the Islamic corporate governance and Islamicfinancial product in Australia with secondary data. The major limitation of the study is that thestudy 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 andcontrolled. The structures describe the roles and responsibilities of each and individual in thecorporation. The core agency problem facing by the firm include separation of ownership fromcontrol. 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 conflictbetween the interest of shareholders and management. The Anglo-US model is characterized byshare ownership of individual, increasing institutional, investors who are not affiliated with theinvestors. The framework describes the roles and responsibilities of three major players of anorganization, 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 ofownership and control in publicly-held companies (Hassan et al., 2014). The Japanese model ischaracterized by the ownership of high level of stock by affiliated banks and organizations. Theequity financing plays an important role in Japanese companies. They play an important roleinsider corporation and a whole system. The German model is mainly applied to German andAustralian companies. The model has three unique characteristics, namely, two models pertain toboard composition and one concern shareholders rights. Firstly, the model has separated intomanagement and supervisory board. The two boards are distinguished, no one simultaneouslyserve on the management and supervisory board. The size is defined by the law not by theshareholders. The major players are German banks, and corporate shareholders. The model hasincluded 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 hasstring and effective framework which shows improved performance of the system. The Islamicfinance is benefiting from its structural and cyclical drivers. The GCC accompanied by the surgein Islamic finance and EMEs has grown from 15% to 20% in the past four years . The corporategovernance provides rules and regulations which ensures good practices guide for themanagement of the institution. The structure of a company and the incentive system addressprint-agent issues which ensure that the executive management serves long-term benefits to theshareholders and the management of the company. The OECD principles of corporategovernance include the endurance for an effective corporate governance framework, rights ofshareholders and key ownership functions, equitable treatment of shareholders, role of