Globalization is the development of worldwide integration. More specifically, it is the process of combining the economics, societal values, and cultures through communication and trade. Because of this, it is a key factor to be aware of all of the world’s environments and motives. The idea of globalization comes with several positives and negatives. Positives including the fact that the world will be more unified. However, people fear that this will bring the world to a more communistic society with sweatshops and degradation. Globalization is seen as inevitable and impossible to prevent, but not everyone approves of the changes occurring. It is affecting so many industries and studies as a whole. The education of accounting is a prime example of a study facing the many effects of globalization.
To understand how globalization is affecting the education of accounting, the ideas of IFAC and IAESB need to be understood. IFAC stands for the International Federation of Accountants. They are a group of 157 members from over 120 countries made to represent the 2.5 million accounting professionals. They serve to the public’s needs and contribute ideas to make the global accounting industry stronger than ever.
They are the speaking bodies when considering international unity of standards amongst all countries in the world. The IAESB, the International Accounting Education Standards Board. This group is more focused on the implementation of a globalized education standard. They find value in advancement on contemporary issues relating to the accounting profession as a whole including the development of education (Accounting Education).
The accounting education system has been drastically changing due to the effects of globalization. The big effect that this is causing is a large gap between principles and the education of them between varying countries (GAAP vs. IFRS). Because of this, concepts are being reevaluated to be understood and used as policy to be used internationally. To be able to revise the education of accounting, many more requirements are being enforced in institutions. The required amount of credits to be able to hold a Certified Public Accounting license has been shifted from 120 to 150 credits, forcing many accountants to attend graduate school to be able to fill the credit requirement (Globalization). More courses of study are being added to the list of accounting classes that need to be taken to graduate with a B.S. in Accounting. It is predicted that foreign language and international requirements will now be a part of the change so that professionals can obtain more knowledge of the integration of the worldwide economy. Because of this, textbooks are constantly being revised and sold as new. This is also putting a strain on the professors of accounting. Years ago, international economy and globalization were not emphasized in their studies and in their professional careers. Therefore, they are not going to be able to teach on account of this information that they have a large gap in their knowledge of the subject. This is all to be able to prepare students for the increasing difficulties of the CPA exam that are shifting importance to globalization (Nolan).
Globalization is not only causing students to feel the changes made to the accounting education system, but professionals currently in the field as well. These changes in the focus of accounting and international standards are hindering at the current accounting professionals and how they develop their methods to current lines of work. They already went to school and hold their CPA license, yet they are behind in the knowledge that is being taught now. This is going to create a higher demand for the younger generation accountants and a lack of need for the older generation. It is also going to hinder the demand for accountants who studied in the United States because of their lack of specific knowledge towards the principles of the IFRS. In the near future, outsourcing will be the most efficient and effective way to hire accountants strictly on their knowledge of international accounting standards (Nolan).