Globalization Presents an Opportunity for Young Accountants
Increasing globalization requires accounting companies to hire young professionals who have knowledge of international accounting law. For this reason, it is beneficial for accounting students as well as young accountants who are new to the industry to keep up to date with international accounting standards. Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS) are the two competing accounting standards that will be increasingly vital for young accountants to know as globalization becomes more prominent. The understanding of both GAAP and FASB is especially important for accountants who work with international clients.
GAAP dominates accounting in the United States and is allowed in a handful of other locations throughout the world, while IFRS is used in over 100 countries. Despite GAAP being the less prominent accounting standard, it is unlikely for the U.S. to fully adopt IFRS. The Securities and Exchange Commission (SEC) explains that outside standards are required to demonstrate “an improvement on existing U.S. GAAP” (Rosin). Over the years, the standards have converged to a degree, but several major differences still remain. Some professionals in the field who comply with GAAP do not agree with certain requirements. The presentation of items at fair value versus historical cost is a common example; many believe that fair valuation provides more meaning to readers of financial statements. In her article, Melanie Rosin states that “Not everyone will be open to absorbing all the learning costs associated with embracing the new standards, even if the benefits they could derive would eventually outweigh the costs.” However, in order to keep up with increasing globalization and the changing job opportunities it is necessary for accountants to remain educated about these international trends.
Globalization affects not only an accountant’s need to understand international standards, but also his or her potential job opportunities. The Accounting Across Borders article highlights this growth: “The trend toward more globalization is likely to continue for U.S. companies, since more than 70% of the world’s purchasing power is located outside the United States, according to U.S. Department of Commerce data” (El-Ramly). With the world economy and stock market on the rise, companies are looking to push their growing businesses overseas. Also, according to a survey, “Sixty-three percent of nonexporters said they would be interested in selling to a foreign client in the future” (El-Ramly). With this expansion comes the need for companies to hire accountants with international expertise.
Young accountants would find it beneficial to expand their knowledge and understanding of international accounting principles for many situations; for joining a large company, assisting a smaller company in conducting business overseas, or building their own business. Bruce Pounder states, “It all boils down to enhancing your KSAs and credentials. Lifelong learning is not merely desirable, it is essential for career success in an increasingly globalized world”. He recommends online seminars as a great source of up-to-date information for young accountants. CPE provider Leveraged Logic launches an online seminar called “This Week in Accounting,” which often focuses on international accounting (Pounder). Also, various states’ accounting organizations have begun to establish committees and practices to accompany the globalization of accounting. Pounder points out, “…the North Carolina Association of CPAs has an International Practice Committee which helps member CPAs (1) become conversant in global business practices and strategies so they may better advise their clients in these areas; and (2) provide services in the international arena such as cross-border tax planning, multinational company mergers, joint ventures, etc.” (Pounder). These valuable resources can be an easy way to stay in touch with current accounting topics.
Young accountants who are willing to expand their knowledge of international rules will find themselves presented with many opportunities. This rapid expansion into new countries will bring about a broader market for international accounting expertise. Experienced accountants should also attempt to stay on top of current international accounting trends as they will be inevitably affected by these changes as well.
El-Ramly, Yasmine. “Accounting across Borders.” Journal of Accountancy, 1 May 2014, www.journalofaccountancy.com/issues/2014/may/20149387.html.
Pounder, Bruce. “How Globalization Is Affecting U.S. Accountants.” Accounting Web, 2006, www.accountingweb.com/sites/default/files/How_Globalization_is_Affecting_US_Accountants--by_Bruce_Pounder_of_CPEanywhere.pdf.
Rosin, Melanie. “Will We Ever Close the GAAP?: A Look into the International Convergence of Accounting Standards .” Michigan Business and Entrepreneurial Law Review, vol. 6, no. 1, 2016, repository.law.umich.edu/cgi/viewcontent.cgi?referer=https://www.google.com/&httpsredir=1&article=1057&context=mbelr.