July 29, 2021

Globalization is Changing Accounting Systems – Why is it Changing Our Business?

Globalization is a term that is increasingly being used to describe the changes taking place in business and commerce as a result of the accelerated growth of the Information Technology (IT) industries. The basic concept of globalization is that there are numerous different systems, procedures and interactions that take place across national boundaries with significant effects on business activities at both the local and international levels. This article is an attempt to provide some basic information on the global impact of globalization on accounting. Globalization is indeed changing accounting… but not in a way that most businesses and professionals would expect. One of the first reactions that comes to most people’s minds when they hear of globalization is that of fear of losing their jobs in the United States or elsewhere in the world. Globalization does indeed impact accounting… to a certain extent.

Globalization has indeed affected accounting because of the increased need for specialized and cross-functional departments, which is precisely what led to accounting systems development. This was a necessary step in order to create a “world-sized” business that had to be supported by cross-functional departments across all of its different aspects including manufacturing, finance, marketing, etc… The advent of information technology and the development of internet based accounting systems have dramatically changed the face of accounting. Accounting information can be shared by individuals across the globe quickly and easily using a computer. Thus, accounting forms and reports can be distributed in a timely fashion and easily make back-ups of data much easier and cheaper than it would have been in previous decades.

These days the largest and most successful international corporations are actually smaller home-based business. As a result of globalization, many of these businesses have begun to utilize accounting software and accounting databases that are tailor made for the international business environment. This type of software and database typically allows a company to track its different aspects of business much like a corporation would. In addition to this globalization has also lead to a massive increase in the number of individuals who are now self-employed and conducting their own accounting as well.