Effect of globalization on accounting practice and standard

Local firms were scrambling to recruit, train and retain talent. The situation in Brazil is not unique. This is due mainly to increased regulatory scrutiny, globalization and the ongoing transition to IFRS.

Effect of globalization on accounting practice and standard

Schmalenbach Institute for Business Administration Conference Schmalenbach-Tagung Cologne, Germany April 18, The Securities and Exchange Commission, as a matter of policy, disclaims responsibility for any private publication or statement by any of its employees.

The views expressed herein are those of Mr. Herdman and do not necessarily reflect the views of the Commission, the Commissioners, or other members of the Commission's staff. Thank you very much Dr. I am very glad to have the opportunity to speak at this conference, as it gives me the chance to stress the importance of the relationship between the United States and Germany and other members of the European Union on financial reporting issues.

Over the last several years, we have seen an increase in the number of German companies listing in the United States. The shares of some of Germany's most prestigious companies now trade on U.

This development benefits all those involved.

How Accounting Practices Can Support the Globalization of Small Business | IFAC

It provides German companies with access to a deep and liquid source of capital - including a "currency" in the form of listed stock available for acquisitions in the U. And it increases the integration of the global economy.

It is a positive development that I hope continues into the future. Today, I would like to spend some time with you discussing International Accounting Standards, or their new name, International Financial Reporting Standardsthe infrastructure that supports their use, and my current thinking on potential action the Commission could take in response to the Concept Release published in As I am sure you are aware, that release was the vehicle used by the SEC to seek input as to what would be its future position with respect to the use of International Accounting Standards in financial statements filed with the Commission by registered companies and those seeking an initial registration.

But before I go on, I must remind you of the standard disclaimer that my remarks today are my own, and do not necessarily represent the views of the Commission, the Commissioners, or other members of the Commission's staff.

Developments in the International Capital Markets More than ever, recent events have clearly demonstrated that the countries and capital markets of the world are increasingly interdependent. A shock in one area may affect the others. Investors have shown increasing interest in cross-border investment opportunities, and indeed, technology is making borders disappear.

As a result, we have seen dynamic changes in both domestic and foreign markets.

Effect of globalization on accounting practice and standard

Capital flows to opportunity everywhere, and information - particularly financial information - is the critical currency for investors seeking returns and for companies seeking capital to grow.

As financial information is primarily driven by accounting standards, the staff has had a keen interest in IAS and the developments related to those standards. As we worked in the area of IAS, we heard from issuers and others about the requirements to access the US markets.

One of the things we heard was that having two sets of financial statements - one set that has been prepared in accordance with IAS and the other which has been prepared in accordance with U.

GAAP - was difficult for users to understand. Companies would report the results of their operations under the two sets of standards and, in some instances, those results would be markedly different. As a result of reporting under two standards, the company would have the challenge of explaining that both sets of financial statements were "correct", even though the amounts reported showed different results, sometimes significant in amount.

It is easy to appreciate the concern raised and why many would like to avoid this situation. As part of a reconsideration of the requirements for foreign private issuers, and as I mentioned earlier, the Commission issued a Concept Release in February seeking public comment on many aspects of IAS and the potential for the SEC to reduce or eliminate its requirement to either file financial statements prepared in accordance with U.

GAAP, or reconcile net income and shareholders' equity to the amounts that would be obtained under U. Within the Concept Release, we solicited comment on the status of the financial reporting infrastructure that supports the use of International Accounting Standards.Globalizations Effect on Accounting Industry Essay.

The public accounting industry, due to rapid changes in the global landscape, will grow internationally while remaining flat domestically - Globalizations Effect on Accounting Industry Essay introduction. This is due to the two major facets of globalization and its effect on the industry.

Accounting education has become more than just studying and knowing how to create financial statements, but is also about being informed about the global market. Technology has made it impossible for businesses to operate without being impacted by.

incorporated in the revised accounting standard. In addition, also like in many member countries, the IASC developed a statement explaining the conceptual basis for the accounting standards it was to issue. The paper is trying to present also the efforts of the to main accounting systems: US GAAP and IAS/IFRS in order to achieve in the next period the convergence, in order to be able to propose to the financial world an unique accounting model.

This article focuses on international accounting. It provides a description and analysis of the principle international accounting standards as developed by the International Financial Reporting.

Accounting Standard-Setting The SEC relies on an independent, private sector standards-setting process that is thorough, open, and deliberate. While the Commission has the statutory authority to set accounting principles, for over 60 years it has looked to the private sector for leadership in establishing and improving accounting standards.

How Accounting Practices Can Support the Globalization of Small Business | IFAC