- Business and Employment
The Effect of Globalization on Accounting Education Programs
In today’s international business network, globalization has impacted many different corporations and firms. However, unexpectedly it has also altered business education, specifically accounting programs. While some programs are considering switching from GAAP (Generally Accepted Accounting Principles) to IFRS (International Financial Accounting Standards) others are completely reworking their entire curricula. Regardless of the specific change, it is clear that the focus has shifted. Now students’ learning is no longer the only priority, but also aligning the learning with the new expectations of firms. As a result, globalization has proven to be an ever-changing phenomenon that impacts education and its institutions
Back in 2011, U.S. educational institutions began the process of switching curricula from GAAP to IFRS. This transition process was a result of the Securities and Exchange Commission’s expected switch of U.S. companies from GAAP to IFRS. With the ever-growing impact of globalizations, more and more countries throughout the nation have been operating on the basis of IFRS. This encompasses international tax and financial issues that can become very detailed and difficult to solve. In addition, these other countries have also been altering their international business and accounting programs for years. For example, a 2007 study administered a survey in five of Taiwan’s universities and found that six basic accounting courses needed to be altered in order to remain current with the times (Kai-Wen 7). Like many other countries, it only seemed fit for the U.S. to follow suit, in order to stay pertinent.
In order to incorporate globalization into U.S. higher-level education curricula, the primary focus is to integrate new IFRS standards. Once U.S. companies made the switch, students would be required to know the difference between both GAAP and IFRS in the workforce. Seems simple enough, however the struggles arise when professors are not prepared to teach the new curricula. Based on a survey administered to college level professors, thirty-eight percent of participants did not feel comfortable enough with the material to be able to teach the new IFRS standards (Shinn 3). Therefore, the professor’s lack of preparation is the most common reason for a bumpy transition in curricula and ultimately delaying the transition. This is not the only reason though.
The barrier preventing IFRS in school curriculum is not solely due to the professor’s personal knowledge, but also to teaching materials readily available. In a survey administered by AAA and KPMG regarding implementing the new IFRS standards in school curriculum:
“[79%] of respondents say that their key challenge will be developing curriculum materials, while 72% say it will be making room for IFRS in the curriculum. Meanwhile, only 16% of respondents indicate that their schools will fund training for professors to learn about the IFRS so they can teach it to students.”
Without the financial means, education institutions are at standstill and unable to implement the new standards into courses. Fortunately, even with these hurdles, education institutions are receiving additional financial assistance.
Accounting firms are doing their part to ensure young accountants receive a proper education. With the change from GAAP to IFRS, the Big 4 accounting firms want to ensure that their future hires will be well versed on the topic. For example, “Deloitte announced that nearly 100 colleges and universities had joined its IFRS University Consortium, deigned to bring IFRS into college curricula.” Founding members of Deloitte’s program, Ohio State University and Virginia Tech contributed to IFRS course materials such as, on-campus lecture tapes and actual Deloitte case studies and solutions (Shinn). Other firms, such as PwC, have awarded grants to help fund new curriculum. Support similar in this nature has proven to be instrumental in the revamp of accounting curriculum.
In addition to big accounting firms, universities are looking within to help aid the transition. Institutions are reaching out to alumni and advisory councils for guidance and training. Universities are utilizing globalization to the fullest by reaching out to European and other professors abroad. This is extremely beneficial because some of these institutions have been teaching IFRS for years. For example, the University of Navarra in Barcelona, Spain, “introduced IFRS into its curriculum more than 15 years ago to accommodate a highly international student body” (Shinn 5). With the help of institutions abroad, universities are determined to ensure that students are properly versed in the new IFRS accounting standards.
The business world is constantly changing and adapting. Especially due to globalization, business from all over the world are in constant communication. With this being said, business education programs need to change as well. Especially with the U.S. shift from GAAP to IFRS U.S. accounting programs are in need of some modification. There have been some obstacles, such as training and funding that have slowed down the learning process. However, institutions and business corporations are doing what they can to ensure students enter the working world with a proper education.
Kai-Wen, C. (2007). THE CURRICULUM DESIGN IN UNIVERSITIES FROM THE PERSPECTIVE OF PROVIDERS IN ACCOUNTING EDUCATION. Education, 127(4), 581-590.
Minnick, Evelyn. "How Does Globalization Impact Accounting Education?" Accounting Web. N.p., 7 Feb. 2016. Web. 12 Nov. 2016.
Shinn, S. (2009). Ready or Not, Here Comes IFRS. Bized, 8(4), 44-50.