Wed. Jan 26th, 2022

Globalization is becoming inevitable within the business world, however many do not realize how globalization not only affects those already involved, but those studying to be apart of it. For over 75 years, the United States of America has been using GAAP (Generally Accepted Accounting Principles) as their standards or rules they have to follow, therefore their students are being taught accounting using GAAP (Scanlan). On the other hand many other countries use IFRS (International Financial Reporting Standards), so then their students are being taught accounting using IFRS. Therefore globalization has a huge impact on the education of accounting students (Nolan).

Surprisingly, many people still do not support globalization even though it creates many job opportunities for international and U.S. students. These people are afraid that jobs will be offered to more international students thus making our unemployment rate to go up. With the U.S. using GAAP and most other countries using IFRS this makes it difficult for international students to get jobs here over U.S. students. On the other hand, it will be just as difficult for U.S. students to get jobs in varying countries. This is an issue that should not be ignored. No matter which way you look at it, globalization is affecting the accounting world, especially the accounting education world.

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Accounting education is changing everyday, from required courses to updated textbooks. An important issue to take note of is the fact that U.S. students are being taught GAAP, while students from other countries are being taught IFRS. Over 100 countries are using IFRS, with globalization becoming more likely, this imposes and unfair difficulty on students (Scanlon). It is significantly more difficult for U.S. students to get jobs in other countries and vice versa, due to the differing standards. The two standards being used has been an issue for quite some time now. In 2002 Robert K. Herdman, Chief Accountant of the U.S. Securities and Exchange Commission, gave an interview in which he talked about the two standards and heard from issuers and others about the requirements to access the U.S. markets; which they stated that having two makes it difficult for users to understand (Herdman). It becomes even more difficult when the results of their operations showed different results under GAAP and IFRS, yet both standards are technically correct. This makes it difficult on deciding which standard should be used globally.

The Securities and Exchange Commission has announced that the United States will attempt to abandon the use of GAAP and move towards using IFRS. This will solve the issue of having two ‘correct’ standards yielding different results. However, there are still many difficulties that will come with the shift from GAAP to IFRS. To start with, current accounting students will be majorly impacted by this change. Since they have been taught GAAP since they started their accounting education they will have to become familiar with an entirely new set of rules and regulations. New textbooks are going to have to be made and new courses are going to be required. This could lead to an extended amount of time in school, which ultimately leads to spending more money on the courses and new textbooks. However, not only will accounting students be affected drastically by this switch from GAAP to IFRS but the switch will also drastically affect professors and accountants (Scanlon).

Professors will need to be updated and educated on the rules and regulations of IFRS. Also, since more classes will have to be added, this could mean professors will have more classes to teach. They, themselves, will also be required to take courses on IFRS so they know it well enough to be able to teach it to students. This could be a huge inconvenience since they already went through school and earned their degree and now they have to go back. Current accountants may also need to enroll in courses about IFRS so they can implement the changes needed to continue to successful (Scanlon).

By rahul