International accounting Essay Example | Topics and Well Written Essays - 1500 words

International accounting - Essay Example Being a member of the EU, Romania in order to comply by the requirements of the membership makes investments for modernization and development of its infrastructure. In the year 2008, Romania showed economic development by an impressive 7.1%, but since then there has been a decline with 1% in 2012. The public sectors act as the buyers of products and services, while the agriculture sector is funded by the EU or developmental banks like the World Bank among others (â€Å"Doing business in Romania†). In the 1990s, Romania started to reform its economy to make it completely market-based. The government applied reform methods between 2000 and 2007 in order to maintain growth and stability in the long run. Although there was economic growth in 2008, there was huge disparity in the income between Romania and the EU. For solution, the government implemented many flexible policies to allow firms to use their resources like labour and capital more efficiently (â€Å"Romania: Functiona l Review† 64). Legal environment and forms of business Structuring of market-based economy in Romania in the 1990s has stabilized the legal regulations of corporate entities. Business activities can be performed by any individual who has the professional qualifications to execute commercial activities, or by legal bodies who have documental rights and efficiency to perform business activities. The classes of business entities in Romania as per regulations are â€Å"commercial companies, regies autonomes, economic interest groups and European economic interest groups, authorised persons, individual enterprises and family enterprises.† (â€Å"Forms of doing business† 27) Joint ventures do not enjoy any legal status as stated by Romanian law and they concentrate on specific operation or series of operations. The members contribute funds and other assets for a common goal and get share of the profit and loss of the ventures. Joint ventures can have shareholders minim um of two with no limit to the maximum number. The number of shareholders can be one to 50 in case of limited liability companies which can include an individual or legal entity (â€Å"Forms of doing business† 27-28). The legal aspect of Romanian employment or Labor Code is governed by Law No. 53/2003, collective bargaining agreement by Law No. 130/1996 and labour conflicts are governed by Law No. 168/1999. Ad per the Labor Code, the terms of collective bargaining agreement that are agreed on at national level can be applied on all employers and employees in Romania in any kind of business activity (â€Å"Tax and legal guide....† 3). Capital markets For economic development of any country, an active capital market plays an essential role. The capital market should be such that national assets can be freely mobilized for serving the national economy. On the other hand, it should be able to effectively utilize the available financial resources. The role of foreign invest ment is important for maintaining competitive environment in the receiving country. Foreign investments generated by another economy have huge potential to accelerate the GDP. Similarly, in Romania financial sources in the form of external capital like foreign investments pave the way for both quantity and quality development of internal capital, and also allows optimum use of the unused available resources. With the development of capital market in Romania there emerges â€Å"