Globalization's Impact on the Accounting Profession
Globalization's Impact on the Accounting Profession
It seems as if everyone has heard of the term "Globalization," but do people really understand the concept? It has had an impact on every facet of society including the environment, culture, government, companies, and even the economy.
Yes, it is true that Globalization has changed the world before our eyes. Due to the rapid growth in technological development, including the Internet, the professional's role will also be changing in the near future. Today, accountants face great challenges such as being competitive, of high-quality, and ready to address new changes in international markets. Accountants may work for some of the biggest companies in Asia and Europe which present new career opportunities for them to go from a national to international platform. On the other hand, for future accountants to work in these countries, they will be required to have additional education, to learn new software and accounting rules, and also be skilled in both computer and communication techniques. Also, when an opportunity presents itself to work outside of the United States, accountants will need to be able to learn the concepts of IGAAP (IFRS-International Financial Reporting Standards). This is now internationally accepted in over 100 nations.GAAP and IFRS have their similarities in that they are easy to translate; however, they also have their differences. GAAP has stricter rules while IFRS allows more room for judgment.
Globalization has its downside, too. One problem is that the number of international students obtaining an accounting degree in the United States is increasing. Unfortunately, this will create an imbalance in the accounting job market if international students choose to stay and work in the United States after graduation. As mentioned earlier, technological developments and the Internet are growing rapidly, and are undoubtedly, the principal drivers of globalization. As more and more people utilize accounting software for tax preparation, the need for accountants will diminish. Why should we be concerned about Globalization? As businesses become globalized, it will have a direct affect on the accounting profession. Borders and regulations regarding international trade have been modified; therefore, making it easier for both small and large corporations alike to do business. It is imperative that accountants acquire the necessary skills to make the transition from the national to international level. With this change, the educational requirements should be reevaluated so students are better prepared to learn accounting at an international level. As a result, new career opportunities will open throughout the United States and abroad. Also, there is a high demand for those who know international accounting principles. There are benefits for accountants to switch to IFRS; however, a rigorous educational evaluation needs to be made in colleges to better prepare students entering this field. In fact, accountants will have no choice but to learn the new global system.
Globalization is not going away. As a prospective accountant, it is important to be fully prepared for the new global demands. GAAP's role seems as if it is being threatened by IFRS. The reality is that companies are globalizing with the unique purpose of increasing its profits. We, too, are trying to increase our profits to stay competitive in today's market. Secondly, it is critical that a new course called Accounting Information System be added to our university programs to better prepare accounting students. According to the Orange County Business Journal (2007), Sir Dean Samsvick, Managing Partner, KPMG LLP Irvine, said, "This new era is characterized by increasingly complex transactions, an intensified regulatory and reporting environment and an increasing demand for the globalization of accounting and auditing standards." There is clearly more pressure on accounting professionals to expand and enhance their knowledge, skill, and abilities. Globalization is the way of the future, and in order to be competitive in the world market, it is necessary for change to take place.
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