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Finance in a Global Context - Coggle Diagram
Finance in a Global Context
Financial Reporting Standards
Transparency Across Borders
International Accounting Standards Board
Standard creation
Defines reporting rule
Historical/legal traditions
National accounting differences
Limit full convergence
International Financial Reporting Standards Foundation
Promotes comparable accounts
Global framework
Adoption variation
leads to partial harmonisation
Required in EU
Optional or partial in United States, Japan, India, China
Facilitates multinational operations
Can lead to changes in regulatory standards
Shared standards
Enable global investment
National systems still shape reporting outcomes
Economic & Financial Flows
How money moves globally
World Bank
Development funding
Promotes growth and global demand
Loans/grants to poorer nations
Institutions
Multinationals
Investment & production networks
Increase trade
Increase capital flows
Technology transfers
International Monetary Fund
Monetary Stability
Reduces contagion risk
Stabilises exchange rates
Supports countries in crisis
Global imbalances
Surplus vs deficit nations
can trigger crises if unsustainable
Test system stability
Tax & Exchange Rates
Government - Market Interaction
National tax systems
Corporate location decisions
businesses shift profits to low-tax jurisdictions
Government intervention
Currency stabilisation
influences inflation and competitiveness
Tax rules shape where they operate
Can trigger currency volatility
Organisation for Economic Co-operation and Development BEPS initiative
International cooperation
limits tax base erosion
Tax rules shape where businesses report profits
Exchange rate movements
affect export prices, profits, and asset valuation.
Currency value changes
Global imbalances can influence exchange rate movements and government intervention.
Multinational investment decisions link to both tax systems and financial reporting standards.
Global Finance System
Interdependent network