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How government policy decision influenced Financial Management - Essay Example
Author : jacobineil
Finance & Accounting
Pages 4 (1004 words)
How Government Policy Decision Influence Financial Management (Name of Institution) Introduction A government policy is a rule, principal or a guide to decision making. A government policy seeks to help in planning, directing and influencing decision making with an aim to achieve a rational outcome .A policy is implementable and procedural and as such, policies assist in both objective and subjective making of decisions…
Policy Decisions and Influence on Financial Management There are many policy decisions factors that influence financial management. These include taxes, wars and financial influences, political changes and the stock markets, investments and accumulation goals. Taxes Taxes are the most popular and strongest influence given that it deals with use of money. Taxes are a way of generating revenue for the government (Hu, Li, Liu, Baolei, & Gaoling, 2012). Where the government or an organization overtaxes it’s people then enough money is available but citizens living below the poverty line in such a country may be highly impoverished due to heavy taxation .So for a government to manage its finance properly, then it must follow the laid down rules and regulations so that there can be a balanced change in the budget when taxes are increased (Choi, Kim, Sami, & McKenzie, 2012). Wars Political changes in a government structure may trigger wars such as post-election violence as witnessed in some countries. This will definitely affect the stock market of such a country and the spending behavior of its citizens and this affects businesses some of which come to stand still. ...