ipl-logo

Effects Of Globalization On Accounting

2070 Words9 Pages

THE EFFECTS OF GLOBALIZATION ON ACCOUNTING

Abstract: In the circumstance of globalization, the situation of accounting becomes complex and incites discussion and debate in aspects of trend, scale, and impact in accounting world. With the changes the globalization brings about, it is vital to comprehend what the changes are and how they influence the accounting. This paper aims to analyze the effects of globalization on accounting basically from three perspectives------ the effects on the Generally Accepted Accounting Principles, management accounting, and threats and opportunities for accountants.
Introduction

Every industry faces unavoidable changes in this rapidly globalized century, so does accounting. With the widespread technology, …show more content…

The businesses scale up every single day and keep enlarging the circle they can cover so that they can obtain more information and achieve more goals. Obviously, this can affect accounting field and make a big progress. As the business scale increases to international, accounting will record more transactions over many different countries. But in this recording process, the issue is that every country has divergent accounting concepts, reporting practices, and principles. The distinction between two countries causes barriers in the transaction process and measurement system. For example, the trade between U.S. and Canada will consider both US GAAP and Canada GAAP and the transaction process will be complicated and time-consuming. We firmly believe this situation is not what international businessman want to see. The desire of harmonization appears intense and the need of international trade comes considerably high. Global accounting demands unified accounting …show more content…

In the past, the accounting job in the United States as well as in the whole world gave off an impression of being focused on the planning and evaluating of financial statements. Numerous people consider Certified Public Accountants (CPAs) and different specialists of bookkeeping when someone mentions accounting. Then again, in different parts of the globe, management accounting is a division of the accounting field (Sahi & Dua 2012). In such parts of the world, management accounting and financial accounting are considered two separate professions. As a subdivision management accounting manages monetary and non-money related data to bolster a scope of administrative choices. Then again, its financial side focuses on budgetary information just to bolster both investors’ and creditors’ choices on capital distribution (Kinney & Raiborn 2008). On the other hand management accounting essentially concentrates on enhancing business execution yet not guaranteeing that the business fits in with the set gauges. From this viewpoint, it is evident that management accounting is always dominated by financial

Show More
Related

  • Pension Plans: GASB Vs. FASB

    740 Words  | 3 Pages

    The purpose is “to develop, implement, and establish standards for accounting and financial reporting activities are accurate and reliable, and the resulting financial reports are as accurate and beneficial to the end users.” The end users that are discussed in the purpose are the outside users of the financial statements. Outsider users are……

    Read More

  • Macy's Accounting Principles

    185 Words  | 1 Pages

    The financial data and the information provided in the analysis of the financial situation are following the accounting principles (GAAP). Some other data and results which are not accepted GAAP but related

    Read More

  • FASB Accounting Standards Codification

    1827 Words  | 8 Pages

    The FASB Accounting Standards Codification (FASB Codification) is the only source of authoritative GAAP apart from SEC issued rules and regulations that apply only to SEC registrants. The FASB issues an Accounting Standards Update to inform people about changes to the FASB Codification, which includes changes to non-authoritative SEC content. In relation to International Financial Reporting Standards (IFRS), after a new IFRS Standard is issued and before it becomes effective, the International Accounting Standards Board (IASB) helps stakeholders to understand the new Standard's principles very well. The activities of the board promote greater consistency in stakeholders' understanding of new Standards as the practice develops, which supports

    Read More

  • Global Trade Affecting Canada's Economy

    807 Words  | 4 Pages

    Today, global trade has evolved and Canada’s internal trade rules have not kept pace. Barriers to interprovincial and interterritorial trade are impacting our ability to take advantage of the benefits of our economy. While many of the irritants may appear to be minor, these minor differences can mean big disadvantages for Canadian consumers, workers and businesses. It is time

    Read More

  • Wgu Audit Task

    529 Words  | 3 Pages

    Clients must keep records and books of accounts including cash book, sales ledger, purchases ledger and general ledger. Supporting documents such as invoices, bank statements, pay-in slips, cheque butts, and receipts for payments, payroll records and copies of receipts issued should be retained. A valuation of the stock in trade should be made at the end of the accounting period and the appropriate records maintained. Company should record sufficient to explain each transaction and to enable a true and fair profit & loss account and balance sheet to be prepared. At the end of the accounting period, a physical stock-take should be made to ascertain the quantity and the cost of the stock in hand or the cost of work in progress statements and

    Read More

  • Target Corporation Executive Summary

    477 Words  | 2 Pages

    The Target Corporation, NYSE symbol TGT, had revenues in 2015 of $72,618 million. In order for Target to transition from General Accepted Accounting Principles (GAAP) to the International Financial Reporting Standards they will first have to follow the IFRS 1, which is the First Time Adoption of International Financial Reporting Standards. The IFRS 1 is the structure pertinent to those implementing IFRS for the first time (Gornik-Tomaszewski & Sellhorn, 2010). In order to transition from GAAP to IFRS companies need to undertake three steps. Those steps include 1) Selecting an accounting practice that is in compliance with IFRS, 2) Prepare an initial IFRS statement of fiscal position, using the date of transition to IFRS as starting date, and 3) Present and disclose their first set of IFRS financial reports along with an rationalization of the conversion from GAAP to IFRS (Gornik-Tomaszewski & Sellhorn,2010).

    Read More

  • Home Depot Financial Analysis

    365 Words  | 2 Pages

    Edmonds, T. P., Tsay, B., & Olds, P. R. (2011). Fundamental managerial accounting concepts (6th ed.). New York, NY: McGraw-Hill

    Read More

  • Essay On Pro Forma

    552 Words  | 3 Pages

    In 2002, the SEC adopted new rules and amendments to address public companies’ disclosure or release of certain financial information that is calculated and presented on the basis of methodologies other than in accordance with generally accepted accounting principles. The accrual accounting is more popular and be widely used in business world because it produces more accurate and faithful financial statements that constitute better representation of actual circumstances than its main competitors. The major weakness of accrual accounting is that there is some time issue such like the time of occurred and time of recorded would probably be different and it increases the risk of financial information and the risk of correctness. Also, the accrual accounting generally cost more to operate compared with cash accounting

    Read More

  • Inventory Valuation Analysis

    1594 Words  | 7 Pages

    Having different accounting standards in the world is a problem for multinational public limited companies and investors in order to be able to compare and evaluate financial statements (Doupnik & Perera, 2009). Due to the economic and financial scandals and meltdown in recent years, the pressure has been increased on some countries such as United States. Therefore, it must eliminate the gap between the International Financial Reporting Standards (IFRS) and US Generally Accepted Accounting Principles (GAAP). The world of accounting diversity will have consequences on such changes, and the standard convergence of US GAAP with International Financial Reporting Standards also largely affect corporate management, investment, stock market, accounting personnel and accounting standard setters. In addition, the convergence of accounting standards will change the approach for international accounting harmonization to CPA and CFO, it affects the quality of international accounting quality standards and the effort made toward GAAP and IFRS convergence

    Read More

  • Southwest Airlines Management Accounting System

    1505 Words  | 7 Pages

    Introduction: Here in this assignment a management accounting report needs to be prepared for analyzing how management accounting can be useful in providing the managerial information for the purpose of decision making. The organization selected to make this analysis is Southwest Airline. It is a management accounting report in which starting from the background of the company, the management accounting system of the company has been analyzed and how its’ providing the information for the purpose of management decisions being evaluated. Background of the company: Southwest Airlines was shaped in 1978 with reason to serve voyaging service via air course. What's more, after consolidation southwest aircrafts persistently succeed regarding productivity, great worker and union connection and consumer loyalty.

    Read More

  • The Importance Of Accounting In Personal Finance

    748 Words  | 3 Pages

    According to Averkamp (2016), “accounting is the recording of financial transactions plus storing, sorting, retrieving, summarizing, and presenting information in various reports and analyses”. Therefore knowing how to carry out these tasks

    Read More

  • Essay: Why I Chose To Study Accounting

    894 Words  | 4 Pages

    My interest in Accounting stemmed from my optimistic expectation about career development in this field. Accounting is so important in the business world that only on the basis of accounting information, management is able to make investment decisions, and optimize internal operation. Thus, it is widely applied to every business sector. However, due to a strange combination of circumstances, I was matriculated by Biology and Medical Engineering College, instead of the Economic and Management College, in which I could accumulate the knowledge that would allow me to realize my career ambition. Changing major was not easy to operate in our university.

    Read More

  • The Importance Of Accounting History As An Academic Discipline

    1108 Words  | 5 Pages

    It is this that justifies accounting history as a crucially important academic discipline. “History, in itself is instinctive and indigenous to all of us” (Carnegie. et al, 2011), whether individuals know it or not, everyone’s decision making process is strongly based on past experiences, and the past is the key source resorted to whenever a decision is needed to be made. The same is applicable to accounting, the decisions made today in all practices and approaches are drawn from the historical developments in the accounting process, that have led the practice

    Read More

  • Importance Of Mathematics In Accounting

    972 Words  | 4 Pages

    These procedures include audits and tax consultation, which demands not just knowledge of the tax law but also of interest, gross profit calculations and other business concepts. Also, an accountant must be skilled in math in order to perform practically in any aspect of their job. If a person has an interest to pursue accounting courses, gaining a broader view of the overall accountant’s work will truly help a person to decide whether to enter the field or

    Read More

  • Importance Of Accounting Information System

    925 Words  | 4 Pages

    The main important purpose of the accounting information system is to promote the activity of the enterprise and to form a reliable and real picture of it. In addition, the accounting information system promotes the activity of the enterprise effectively by preparing up-to-date information statements, providing as much information as possible so that the data should be understandable all users not only for the experts(bookkeepers) and tracking liquidity. Nowadays accounting software is a programme which makes accounting work processes easier and faster and which makes it possible to meet the information demand of the management. It also can support the accountants’ work, helping to compile reports by in helping to compile reports by recording and processing the events concerning the

    Read More

More about Effects Of Globalization On Accounting

Open Document