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  • Globalization's Impact on Accounting Research

    Posted by fraser walcott April 20, 2016 - 312 views - 0 comments - 0 likes

    In the past the only thing accountants had to be experts in were the accounting and tax laws for their own country (Minnick). The only time they had to be well versed in any international accounting laws were if they worked in another country or if the company they worked for did business in another country that is not their home country. Within the last 30 years or so things have drastically changed within the accounting world due to globalization and technology. Before this shift accounting had been a very singular business all accountants had to worry about was GAAP. Now due to technology growing so fast it seems as if the world is becoming much smaller and communicating with people outside of the United States is as common as contacting your parents or siblings. The idea of the world getting smaller is good from a business standpoint with the opportunity to expand your customer base and the cost savings from the ability to move jobs overseas and more opportunities for travel for accountants all over the world (Gambrell).
    For the accounting profession things have gotten a lot more complicated, the older generation of accountants either have a hard time keeping up with the changes or they retire all together. For the new generation of students trying to get into the accounting profession, there is a heavier course load that they have to go through in order to get an accounting degree today. Today not only do the students of today have to have a sufficient knowledge of GAAP but they also have to be well versed in IFRS in order to compete in the financial market today. Students also have to be proficient with excel and technology in general in order to work with various companies all around the world. Textbooks are also very expensive and are always changing every couple of years due to GAAP changes and new tax laws, especially because of the convergence project between GAAP and IFRS. This change will make it so that students have to learn both GAAP and IFRS laws and be able to do it well.
    It is even harder if you want to get a CPA, today it is not enough for an accountant to do the basic audit and tax work that the profession is known to do they have to be more. CPA's now have to be well versed in all aspects of financial services and a more well-rounded business person that can manage and consult clients. To get the CPA exam you have to have your bachelors in accounting and at least a year of practice approved by a licensed CPA. The CPA exam itself is a lot harder than it used to be and it is about to get a lot tougher in 2017 when the exam changes again. According to the AACSB the exam will have four parts audit, business environment, financial accounting and reporting, and regulation. What makes the exam tougher is the IFRS aspect because of the pending changes from GAAP to IFRS in the future. There has been a battle between what the business world wants their future accountants to be able to do and what the academic world is actually teaching the students. With the constant changes in the convergence project both students and teachers have to be able to learn all those changes and adapt them into the material that they have already learned. The biggest problem education wise is that in order to become a CPA in America it is a lot more stringent then it is in other countries. American students have to get 150 credits whereas just an accounting degree will suffice in other countries. The question then becomes is America too strict or are all the other countries around the world to lax in the qualifications to become a public accountant? This is a hard question to answer with the different rules and cultures that the world lives by. Over the years it has been said that while theory needs to be taught there also needs to be a bigger emphasis on real world case studies. Some institutions like Harvard have gotten an early jump on this approach while other institutions are slow moving or have hardly moved at all (Cheng). The education of accounting is something that will most likely always need to be adjusted for the constant changes in the business world.