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Fundamental concepts and techniques in accounting and finance - Essay Example
Finance & Accounting
Pages 7 (1757 words)
The aim of the paper shall be to present a set of fundamental concepts and techniques in accounting and finance and to do so in sufficient detail that the reader can extract usable information and develop practical skills. …
Fundamental concepts and techniques in accounting and finance
The field of financial management has experienced gradual but significant change during the twentieth century. During the first two decades of the century, financial managers were concerned mostly with the legal issues surrounding the issuance of stocks and bonds. This focus of attention reflected the primitive nature of the capital markets in the early 1900s, the wave of mergers and consolidations occurring at that time, and the lack of what now is considered routine full disclosure of accounting and financial information about companies offering securities to the public. With the Depression of the 1930s, the main focus of financial management shifted to the defensive aspects of business survival.
As we enter the twenty-first century, the most significant trend to impact successful corporate financial management will be the continuing globalization of business in general and financial management in particular. There is no major U.S. or foreign corporations that do business solely within the confines of their own country. The need to deal with multiple currencies, worldwide money and capital markets where investment capital moves across borders at an increasing pace facing fewer and fewer barriers, a wide variety of accounting systems and tax laws, and a multitude of political risk environments is now a normal part of the responsibilities of a corporate financial manager. This globalization of business does not change the fundamental theories of corporate financial management, but it does have a substantial impact on corporate financial practice and domestic financial markets. ...
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