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Audit Case

Autor:   •  July 21, 2012  •  Essay  •  351 Words (2 Pages)  •  1,373 Views

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A. Background of the Study

A remarkable trend in international business in recent years is the rapid globalization of markets for many goods and services (Douglas and Craig 1995). This phenomenon is largely the result of advances in transportation and communication technologies, coupled with reductions in barriers to international trade and investment (Levitt 1983; UNCTAD, various issues; World Bank 1997). Markets that were previously limited to the confines of a firm's home country are now global or regional in scope. Consequently, firms of all kinds and sizes continue to enter foreign markets in large numbers. Widespread participation in international marketing by firms, including those that previously served only customers located in the home country, is expected to continue as more countries make their markets accessible to foreign investors (Kumar and Subramanian 1997). Further, many more firms are being forced to enter foreign markets as domestic competition intensifies and firms recognize that success in foreign markets can increase sales volume and improve cost position (Keegan and Green 1997).

An important development that has contributed to the widespread expansion into foreign markets by companies is the tremendous amount of economic cooperation existing among nations today. Today's economic cooperation ranges from treaties between two or more countries on reductions of barriers to trade to full-scale harmonization and unification of economic institutions and policies. The General Agreement on Tariffs and Trade (GATT), which is a treaty by 125 countries to promote trade among signatories to the treaty, has helped liberalize world merchandize trade. Over the years of its existence (from 1948 to 1995) members of GATT worked to minimize tariffs, quotas and other obstacles to international trade. The World Trade Organization (WTO) is the successor to GATT. In addition to taking over

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