It is also of the utmost importance that a business understands the financial information that is presented by international firms. If a firm cannot properly convey the financial information of their foreign business associates, they would lack the ability to make sound decisions for themselves and for their shareholders. This disconnect in data translation would also negatively affect the investors of the company, as they may not understand why their company’s decisions are ill-advised. They may also not be afforded the luxury of opportunity to relieve themselves of their shares before incurring big losses, due to not having the information properly translated to them. It is an industry risk, but it could be easily avoided if the right education is in place.
As far as the actual education process itself goes, it would appear as if we are already seeing a major impact on the education of highly-trained accountants. As a current student myself, my university has been proactive in keeping us updated on the changes to the CPA exam, due to be implemented in May of 2017. The exam is said to be more focused on critical thinking and international standards. As a future CPA hopeful, it did not excite me (or my classmates) to hear that the changes to the exam are regarded as making the test considerably more difficult. However, nobody disagrees with the decision to update the test, as today’s world should not be educated and prepared to do business as if it were still yesterday.
Today’s students must also stay up-to-date on not only GAAP’s standards here in the United States, but must also on IFRS for the international side of business. That is a lot for any student to have to learn, but again, a necessary evil. This is a process what won’t last, though, as IFRS is integrated more and more while GAAP becomes increasingly irrelevant. It will not be long until GAAP is completely obsolete. In the meantime, students need to learn both. This can be a very expensive undertaking for an educational institution.
The problem with major changes in an industry is that the students aren’t the only people that need to be educated on the changes. The accountants need to be updated on the new standards that they will be working with. This means that they have to essentially forget a big percentage of their education and learn a whole new way of doing business. And in order to educate these accountants, educators must also be educated on the changes. Somebody has to teach the accountants how to do their job properly!
These changes in education and the varying levels of people that this education must reach could also impact the budgets and the degree programs at schools across the country. As more and more of these changes become implemented, a need for full classes on the different accounting standards will grow. Maybe even a series of classes, and some extra room for all of the people who will need to be educated on the subject at hand. This could elongate some degree programs to 5 years, depending upon the changes deemed necessary, which would cost the students an extra year of tuition. That could be a very large bill to foot, depending on the school.
Globalization is a great thing in the business world. Education on globalization is an absolute necessity in the accounting/financial world if the student wants to have any chance to compete with the rest of the world, who has now brought their competition with them into our own backyards with the advancements of technology. This need for staying constantly up-to-date has far-reaching impacts on the education for it, and will take some time and effort to implement this new information into our accounting world. It is a student’s nightmare to have to learn all of this new information on top of the already frighteningly difficult subject of accounting, but all students will be far better off for it.