Globalization in general is the idea we are moving away from self-contained countries into a more integrated world. The business aspect of globalization is that instead of operating in just one country, business will get their resources and product from multiple countries. Accountants have come to realize the implication of this matter in various ways. When studying at a university, professors can only teach and know so much. Now that more and more accounting firms are expanding and becoming international, it is important to teach the ramifications of how this will affect learning. There is not just one form of accounting. For example, there are GAAP, FASB, and IFRS rules, which are all different. Creating a unified system would not only benefit accounting students, but be easier on the professors. I believe it is important to unify an accounting system and to emphasize why various accounting rules are becoming less important in today's economy.
Accounting is a broad topic that requires analyzation and regulation of taxing authorities, financial markets, and lending institutions along with other types of entities. While evaluating these different types of entities, it is important to consider how it affects them internationally. For example, a company that has buildings in various countries must consider global operations and interactions. Sadly, one type of management system might not be productive in all locations, one reward structure may not be as motivating in one location versus another, and / or allocation of overhead could be immensely different depending where the location is. Accountants are seen as being a part of management. Accounting students take a wide-variety of the same courses as some of the best MBAs, the only difference being the stronger focus in accounting courses, strategy, and analysis. If accounting students are going to assist management in making critical decisions within the global marketplace, they too must become global.
The thought of international accounting standards is nothing remarkably new. The standardization would make financial statements more comparable to one another and decrease costs associated with financing businesses, which would end up promoting economic growth. The inefficiency of GAAP (Generally Accepted Accounting Principles) has resulted in the creation of IFRS (International Financial Reporting Standards). More and more organizations have been adopting IFRS because GAAP is less relevant to the global economy. Even with all the modifications in place, it has not developed quick enough to completely accommodate today's fast-paced business world. This is problematic for American education because primarily GAAP is taught in the accounting curriculum. Unfortunately, this gives other countries an advantage because it better prepares their workforce to be knowledgeable in international relations. Because IFRS is becoming more globally accepted than GAAP, American accountant's knowledge is going to slowly become meaningless. Foreign education systems focus on IFRS, meaning those students will eventually dominate the industry. To remain relevant and competitive in the field, Americans need to have the knowledge and skills about IFRS. American accountants need to be aware of different cultures, economies, and need to learn how concepts are practiced in other regions.
As IFRS is growing, there are multiple ways this will change the business curriculum taught in universities across the nation. Currently, there is not any foreign language requirement at my university for the business program. There will need to be some type of language requirement if we are being taught an international principle of accounting. All American textbooks will have to be rewritten to reflect IFRS and not GAAP. Professors will be required to attend an abundance of training to learn the new standards to property education students. Many of the professors at universities have been in the profession and / or teaching for an extensive amount of time. The change may potentially could hinder their work ability to accurately teach and learn the material. In short-term, the adaption of the process might be challenging, but in the long-run the switch will be worth it because it will create a constancy for all cultures to efficiently communicate.
Accounting is mainly comprised of communication, problem solving and adaption to new rules. The goal of accountants should be to aid management and others to make wise financial decisions. This can only be done if one understands all aspects of a company, including its international relations. Even though I have been fortunate enough to have exceptional professors, I feel as though upon graduation I will be unprepared for the fast-paced business world that is upon us today. After enduring years of tears, stress, anxiety, and the never-ending homework associated with being an accounting major, the last thing I will want to do is undergo more angst to learn a whole new set of standards. The teaching of IFRS might cause a lot of challenges for education providers, but will be more beneficial in the end to open more job opportunities and make students more profitable. As the business world globalizes, accountants need to stay informed and skilled in order to fully maximize their contribution.