What is Accounting?
It’s a commerce-based subject which is basically essential for business organizations as the knowledge and concept in accounting or accountancy help a firm to arrange, verify, and represent their financial data, and if there is a necessity, they have to make sufficient changes also.
What is Globalization?
Globalization refers to some changes or transformations seen all over our world. This is the process through which different countries and their people, governments, and other companies are interconnected to make international trade and investment by the concept of information technology.
Although it sounds odd, accounting, too, gets transformed by globalization as it’s also related to the business sector. But, how they are related is an issue that should be known, right? So, now let’s move on to that topic.
Impact of Globalization on Accounting Education
As globalization symbolizes the changes in the globe to make it a more integrated one, globalization in trade refers to the transformation of business where a company of a country is connected or collaborated with another one operating many firms in different countries. Naturally, its impact is great enough in the sector of business and through this way on the education of accountancy. Let’s discriminate those significant factors mentioned here:
1. Going through the accounting system of the whole world. Previously, accounting students have had to undergo the financial as well as tax systems of the countries they belong to, but due to these impacts of globalization, they have to possess a complete and vivid knowledge of the international financial and tax structure which undoubtedly becomes tougher for the contemporary pupils.
2. Shifting away of GAAP. Generally Accepted Accounting Principles (GAAP) is considered to be the general guidelines for accountants but nowadays they are changing continuously which create difficulties for the students as they have to stay updated regarding all those improvisations. This international accounting system has a great emphasis in this regard and hence, the changes are required too.
3. Developments in international capital market. Several studies have clearly portrayed that countries and their capital markets are dependent on each other. Both domestic and foreign markets have to face multiple changes as the systems are interconnected. Accounting pupils must study all these respective issues to stay up-to-date.
4. Progression in financial reporting internationally. There are notable changes in the international financial reporting infrastructure and those things must be understood by the students accordingly. Otherwise, they would face hassles in their courses.
5. Recent changes: There are numbers of developments seen of late and interestingly, as these markets are interlinked, one change in a particular country may move the total financial structure of the world and naturally accounting education thus, gets some effects from this point of view also.
Globalization poses separate impacts on different Accounting education such as the effects it possesses on management accounting is completely different from that of GAAP. In addition to that, there are some threats and opportunities that are provided for the accountants due to those impacts of globalization in this modern era.