Globalization And Its Toll On Todays Accountants

As accounting goes from the national level to the international level there are new career opportunities available. This does not however mean that landing a successful accounting job is an easier task. Accountants will find it harder to rely on knowing only certain accounting techniques and being compatible with only GAAP(Generally Accepted Accounting Principles) standards. GAAP standards are slowly becoming less dominant as international standards become more important. Focusing on one style of accounting will not work out in accountants favors as skills, knowledge, and abilities become more important then ever.
Financial accounting has been the bread and butter for American accountants for years, although financial accounting is still important is doesn't hold the same value as it did in the past. From a global standpoint, management accounting is starting to play a larger role, it displays internal and external viewpoints as financial was focused more internally. People who excel in financial accounting won't find themselves out of work anytime soon, a good balance between financial and management accounting is still necessary and beneficial. The more you know and the better credentials you have received is the backbone for succeeding in a more globalized accounting community. The saying, "knowledge is power", holds more true then ever. Accountants with limited resources that are unable or unwilling to adapt to changes from the national to international level will find themselves falling behind.
As GAAP's role as the source of standards becomes more threatened by the acceptance of IFRS (International Financial Reporting Standards) it brings about an advantage to many businesses and accountants alike. IFRS was created by the IASB (International Accounting Standards Board). IFRS is becoming a more internationally accepted set of accounting principles, already being used by over 100 different nations. Having set standards for the world will have many benefits, a major one being due to consistency and the ability to compare financial statements more effectively and legitimately. A lot of similarities exist between GAAP and IASB, but there are also significant differences. Which is the reason the accountants that understand the nature of accounting the best will have the easiest time translating from one to the next. Being in denial about the upcoming changes will only cripple you.
The need for accountants to have the ability to work with these standards are in high demand. Accounting principles are becoming globalized because most businesses are becoming globalized. Globalization has opened doors for a lot of new business's, and like accountants the businesses that don't take advantage and adapt to the changes are at risk of falling behind. Not only are large corporations going international but many small businesses are doing the same, creating more opportunity for accountants and the need for accountants to have commonly shared standards would prove beneficial. Companies of all sizes are able to make a wave in the market largely in part due to the internet and its advances it has made with technology. Trading borders and regulations are on the decline, especially in Europe where just about all restrictions have been removed, making trading easier and more commonly done. Large companies are moving to third world countries to make larger profit margins due to cheaper wages with less regulations and restrictions by their governments. As interaction between different countries is steeply on the incline, the need of accountants with the ability to understand and work with internationally accepted standards is all the more necessary. Accountants in the U.S. can get away with not making the necessary changes now, but that may not hold true in ten years or so.
Accountants switching to the likes of IFRS are likely and could help open doors for them in the future. Globalization will bring in new options and choices for accountants that know the IFRS system. However there are complaints about maneuvering from the one system to the next completely. Which is why accountants knowing the rules of both become more necessary. This requires them to have more knowledge then ever due to the introduction of globalization, which will not go away. GAAP is considered to have stricter rules while the international standards allow more room for judgment. There are some methods part of GAAP that are not accepted internationally that has the ability to hurt U.S. corps which is why the U.S. hasn't been quick in accepting these new standards, unsure of where they will lead us and if problems will occur. Accountants true understanding of the sport is highlighted that much more, knowing both systems and the differences between will give an accountant more leverage in deciding their options in the job market.
Globalization is not going away, and being in denial about its existence and the changes that come about with it will only make what you know obsolete or simply not enough. International standards are viewed by many as a necessity as nations are becoming more interactive with one another. Accountant's skills and true knowledge of the practice will become so ever more vital.

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References

1. How Globalization is Affecting U.S. Accountants. 2006. Bruce Pounder. 5 Mar. 2010 < http://www.accountingweb-cgi.com/whitepapers/How_Globalization_ is_Affecting_US_Accountants--by_Bruce_Pounder_of_CPEanywhere.pdf>.

2. Bogoslaw, David. "Global Accounting Standards? Not so fast." Business Newsweek 14 Nov. 2008: 17-17.

3. Robb, Alan, and Susan Newberry. "Globalization: governmental accounting and International Financial Reporting Standards." Oxford Journals. 15 Oct. 2007. Oxford University Press and the Society for the Advancement of Socio-Economics. 5 Mar. 2010.