Globalization of the Accounting Profession

Alamares, Mark Lorenz

Mirasol, John David

TTh 4:10P – 5:40P C302

March 13, 2014

Where is the world of business going? As the world becomes a smaller place, this is one of those questions that many wish to be answered. Will it be a world where countries establish good relations for the sake of economic advancement? Or will it be a world monopolized by great economic powers where one cannot do anything but conform? For now, it cannot be answered, but as far as it goes, globalization is looking good for many countries around the world.

There have been a lot of developments that occurred in the international financial setting over the last twenty years. These may be attributed to some tremendous changes in the world economy – change in business and legal climates, increase in global competition, increase in market-based economies, and technological developments – which also made the interplay of financial centers around the globe (Securities and Exchange Commission [SEC], n.d.).

Accounting, as the language of business, has been simultaneously changing in connection to these said developments, financial reporting mostly. In addition to this, the efforts of the International Accounting Standards Board (IASB) to reduce the diversity of international accounting have intensified. Take the bold move of the European Union (EU), for example, when, in 2002, they have required International Financial Reporting Standards (IFRS) for all companies listed on a regulated European stock exchange starting in 2005. Also, the creation of new pronouncements of the International Financial Reporting Standards (IFRS) adds to these efforts (American Institute of Certified Public Accountants [AICPA], n.d.).

Clearly, the world keeps getting smaller and smaller. The business geography is going on a constant transition towards harmonization and convergence. Since this is what has been happening – creation, revision, and adoption of standards – for quite some time now, it would be a logical...