Accounting Concern In Banking Of Australia -Myassignmenthelp.Com

Question: Discuss About The Accounting Concern In Banking System Of Australia? Answer: Introduction The Reserve Bank of Australia has announced that the new tax would be charged to those banks which are having more than liabilities of $1000 billion dollars (Gitman, Juchau, R. and Flanagan 2017). The banks are not formally accepting that implementation and change the diversity for the longer run. The government needs to make the market for the smaller banks for the long run. The global market is very much volatile and need to be having a certain reserve for the future. Analysis The Australia Treasure department has introduced a new impose of the tax where the financial institutions who lends the money for the commercial purposes and having a liability of 100 billion would be imposed a new tax. The rate of the tax is 0.06 percent yearly which would be payable four times in a year at the rate of 0.0015 % (Bhasin 2015). The four major banks of Australia are Commonwealth bank, National Australia Bank, Westpac and ANZ which would be effective broadly (Lovelock and Patterson 2015). The tax would be levied on the position of the purchasing of the corporate bonds, commercial papers and operating activities. The banks are also ordered not to impose the tax on the customers based on their saving rate deductions or the increase of the rate of their mortgages rates. With respect to this scenario, the major banks will have a negative reaction with respect to this levy as it would put a restriction on their operational strategy. The banks would have to comply to the government and will not have their own power to control the lending process and levy of the interest rate. On the other hand, this levy would be beneficial for the smaller banks as their level of operations is not as huge as the major banks and they would provide small term lending process to the consumers leading to the customers getting attracted to these banks. The theory that is best applicable with this case is the legitimacy theory as this theory is a perception that the operations of an entity are in line with the norms and values that have been socially constructed. In this case, the banks have to stay in line with the levy that has been put forth by the Federal Bank and therefore this theory is most suitable. According to the section 90, the federal government has the excessive power to generate to duties of customs and exercise (Turner 2014). However the levy structure doesn`t apply in the section 90, therefore the tax is imposed on the amount of the assets they hold which is compatible to the land tax. The policies which are imposed are far more vexed as the dark shadows of the federal government tied- grants scheme loom over all matters involving state tax. As the history states that imposing taxed in the Western Australia can hamper the market in the long run. The faith of the levy of the tax is still uncertain as the banks are applying for reconsider the policy. Therefore if the tax imposed then we can state that we are entering in the new phase of history. The decision of the Federal Government is in line with the institutional theory as it is seen that this theory looks at a more resilient and deeper way with respect to the communal structure. This theory takes into consideration the schemes and the rules that have become authoritative principles for the social behaviour. The Federal Bank has undertaken this decision in order to confine the operations of the bank and restricting them within a specified guideline so that none of the banks can exploit the market according to their choice. The levy of tax would be applicable to certain companies and banks and therefore and therefore would be a positive for certain banks but would be a problem for larger and renowned banks and organizations. This decision has a significant effect on the stakeholders as well and this is discussed in the next paragraph. Shareholders can be defined as both primary and secondary shareholders. The primary shareholders are the ones who would be directly affected by the action of the federal government. The common issues where the overall people would be concerns are as follows Economic The economy would state that if the tax has been increased then the primary banks in the Australia would be affected and there would be cash crunch in the market. The smaller banks would be helpful to increase their market share and having a huge market on the daily basis (Sheehan and Gregory 2013). Social Change- The social change justifies about the government has ensured that the tax which has been posed would not be affecting customers of the banks saving or the mortgage accounts in the long run (Galati and Moessner 2013). Work The organisation who works as the middle man such as the financial institutions such as the work would be diversifying in the long run. The work would be overall playing in the court of the people. Time The implementation of the plan is not sure and the timings are also justified. The impact would be in the long run and majorly effected towards to the market. Health The cost of living would be increased and therefore the health related expenses would also be increased (Booth and Whelan 2014). Safety and Security The market would be volatile for the first few months and then after 6 to 10 months down the line would be normal. (Fonseca 2014) The application would be affecting in the long run. The banks as a result of budget announcement would look to take advantage of this situation in the long run and therefore, by staying in line with the legitimacy theory would implement various strategies so that this budget announcement can be deemed to be a benefit in the long run for all the banks. The following are the banking strategies due to the announcement of the budget. Influence the perceived legitimacy The organisations need to influence as per the need of the diversity of the majority in the long run. The organisations also need to address in the long run issues. Manage particular stakeholder groups The shareholders and the stakeholders need to understand the issue for the purpose of the government and the application in the log run. Therefore the need of the change also needs to address in the majority to analysis the market potential in the long run. Increase wealth of shareholders and managers of the organisation Another important issue is the customer and employee retention. The employee and customer would be affected in the daily basis for the major diversity for the effective in the long run (Ilzetzki, Mendoza and Vgh, 2013). The government introduced this levy due to having the current market analysis as per the changes needed in the market. The market is volatile therefore the Australian economy is also affected in the globalization (Kaplan and Schulhofer?Wohl 2017). The reserve bank of the Australia has introduced the monetary policy. The market of the Australia monetary policy is changing in the leaps and bounds. Therefore the changes are certain and having a view of the modern methodology to increase the market share for the longer period of the time. The organisation needs to make the changes for the benefited of the Australia in the overall aspect. The major issue is that the inflation is coming down and there is lot of cash flow in the market. There have been various theories that are available in the economy and the use of the right theory is important so that it would be beneficial to bring out the precise results. It is observed that legitimacy theory and institutional theory are the two theories that are in accordance to the new budget announcement that the banks and the companies can consider in order to improve their operations. The positivism theory and the stakeholder theory will not be applicable as it is seen that these theories does not consider the social aspect of the economy with respect to which the Federal Bank has introduced the law. Therefore, the banks can relate their strategies with the legitimacy theory and the institutional theory as these two theories are based with respect to the communal behaviour and the with respect to the actions that would be fundamental to the society. However, after the evaluation of the case, it is seen that legitimacy theory is the best suited theory as this theory is an g eneralized anticipation regarding the actions of an individual that are accurate and suitable with respect to the beliefs, norms and values that have been constricted socially. This would lead to the development of effective strategies that would improve the operations of the banks as well as improve the position of the stakeholders and the consumers in the economy.; Conclusion In a nutshell we can state that the banking sector is going through the changes and this implementation would be good changes in the long run. The small banks would also be having major changes and going to increase their market share. 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