Many advances in the modern world have changed the ways that information is spread. Rapid movement of information, as well as goods, services, and even customs, from one place to another is known as globalization. On an international scale, globalization allows for practices to cross into new countries, where they can be adopted as the new norms. It “has been created as a need of improving the resource allocation and to develop bigger markets for the global economy (Diaconu).” Globalization has effected international marketplaces, travel, and even education. As far as accounting education is concerned, globalization has had effects such as changes to the requirements needed to test for the CPA, as well as the two different sets of accounting principles that students now need to be aware of, GAAP, and IRFS. Globalization has also made it possible for students to learn on an international scale, with many schools now offering foreign exchange or semester abroad programs. Although globalization can create some confusion due to varying accounting practices worldwide, it also opens up the door for students to diversify themselves as well as gain real-life experience that can be beneficial in future careers.
One of the large effects that globalization has had on accounting education is that students are taught Generally Accepted Accounting Principles, or GAAP, which are not used worldwide. In addition to GAAP, International Financial Reporting Standards, or IFRS, are also used. Both sets of standards are updated frequently, which can make it hard for accounting students to stay current with principles for the United States, as well as international standards. Additionally, the existence and use of both GAAP and IFRS create competition for accounting jobs. With globalization making it easier to compete in an international market, knowledge of both GAAP and IFRS has become a new standard for some employers, and students with knowledge of both sets of practices stand to go farther than those students without. “The movement of business toward a global economy has accelerated the need to move toward global accounting standards (Fosbre),” and as globalization progresses, standardaization of accounting practices acreoss the globe becomes a very likely event in the future of accounting.
In addition to GAAP and IFRS, globalization has also created the need for a more stringent set of requirements in order to take the Certified Public Accounting exam. In some states, the 150 hour rule was created and set into place, requiring students to take 150 college credit hours before being able to sit for the CPA exam. The requirement was created in an attempt to help students better prepare for the CPA exam, as well as for future careers in accounting. In the past, students were only required to have 120 credit hours in order to sit for the CPA. Now, with the addition of thirty additional credits, accounting students in the United States are given the chance to pick up a minor, work towards an MBA, or even learn a second language. In becoming more well rounded, future accountants will have a better career outlook, and will be able to find more outlets for future success.
Though the creation of the 150 hour rule is beneficial to students in the United States, international students are not faced with the same set of guidelines in order to test for the CPA exam. In some foreign countries, only an accounting degree is required to test to become a CPA, and this can create gaps in education. With globalization, accounting firms are moving into other countries, or working with clients in other countries. If CPAs from the United States are collaborating with CPAs from other countries, knowledge of the profession might vary from person to person. On a positive note, each accountant will be able to bring something different to the table, and accounting professionals will be able to learn from one another.