Globalization is the process of increasing the connectivity and interdependence of the world’s market and businesses. The impact of globalization in today’s business world has had an enormous impact on accounting careers in the United States. Professional accountants have had to adjust to an ever-changing business world by continuing to learn new strategies. The changes that globalization has brought on have also had an effect on how education is being provided in regards to accounting.
First, the United States is going through the arduous process of switching, or harmonizing, with International Financial Reporting Standards. The United States had previously been governed by GAAP. Changes will include a lesser cost of preparing or translating financial statements between companies in various countries, making it much easier to interpret because there will be just one common accounting language. Having this one common language will encourage and promote comparability between different international companies. There are also countless reporting differences between GAAP and IFRS. Therefore, the United States will have to adjust and teach these changes in schools. Textbooks will have to be rewritten, seminars will provide useful information, and America will need to undergo a slow, but effective transition in order to thrive with the new system. When the change is complete, having one accounting language will encourage global education and careers. A graduate student who completes the CPA exam could get a job anywhere in the world and adjust. Training would be minimal as the student had been taught the system that is in place globally. This process, however, will certainly take time before it can occur but the framework is being put in place now.
The change is necessary because if America doesn’t accept this process, then they are putting their young accounting students at an unquestioned severe disadvantage. Educated and willing international students will come to the United States for jobs and they will succeed, having already mastered international accounting standards. Companies may need to send current employees to seminars and classes to make a smooth transition. In the past, accountants have always been responsible for formulating and producing important financial statements and have been required of specializing in specific areas. In today’s business world, accountants are being asked of a lot more. It is essential that they also possess some management-type skills. These skills include communication and decision-making ability. The ability to gain knowledge through the aforementioned financial statements and use that knowledge to make sound decisions is essential to today’s global accountant.
Regarding education of accounting students in America, it has gotten tougher and tougher to afford the education necessary to pursue a career in accounting. With America’s struggling economy, extreme and rising tuition prices, and the increasing cutbacks of financial aid, it is not getting any easier for students. The impact that globalization is having in the constantly changing business world is creating the need for more learning and essentially, more schooling. This is definitely one potential problem for accounting students in America. Another potential problem is the lack of a demand for this change. A lot of time and money is going to be placed in teaching students and professionals the new set of standards. Many big companies are on board with the change, possibly because they have the assets and resources to be prepared for it. Some smaller companies do not believe that the change is necessary and would rather keep the current system in place.