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Growing Importance of International Accounting

1. In today’s society, business and cultural environment are playing a significant change in the life of many people. More and more businesses are beginning to operate both domestically and internationally. The expansion of business has to lead the world into a new era filled with creative technology, making life easier. With the effects of international pressures, businesses sometimes need to adapt to or try to influence culture.

Culture is what people value and believe. Trying to change a person’s perspective about one’s culture is not easy. Yet, the cultural environment is changing slowly, as people are more concerned with what is going on economically, politically, financially, and socially and legally. Due to these changes, international factors are becoming more important.

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Along with that comes an accounting change. Many businesses have to conduct a lot of surveys and advertisements to see what consumers are looking for. Global business has created many jobs, competition, technology, and much more. With these differences in mind, every business might have its own accounting system.

This is because of cultural, economic, political, and legal system differences. Laws that are convenient and easy to understand in the US might have no meaning at all to another country. Usages of vocabulary can have a great effect in business depending on what the word means. Developing countries might have a much simpler accounting system than those of the developed countries.

Every country has its own style of living and working conditions. If one accounting system used to satisfy everyone’s country it would be confusing and worthless to certain countries because of differences in things like taxes, sizes of business, compensation plan, or rules and laws. Since the world has a different perspective of how the world should be managed decisions are made very differently. So, it is important for businesses to notice what is going on around the world to stay competitive and survive.

2. Since the economy is constantly changing and affecting people’s lives, the stock market is getting more and more important. The stock market is becoming more important because many people are relying on it to earn savings for the future. People are concern with what is going on in the economy for they are afraid of another recession. If the stock markets are not functioning positively, this tells people that the country is not in good financial standing and that product prices will increase. As a matter of fact, it can cause unemployment, low financial standing. And the slowing down of the economy as a whole. When this happens people will consume a lot less.

To avoid this tragedy, many people are learning more and paying closer attention to the stock market so they can make better investment decisions. Especially people that are retired or going to be retiring. They are the ones who rely on the stock market to support their living. Similarly, young people are investing early because they are better educated and are more involved in society. By investing early will help them earn a good saving for future uses when it’s time for them to retire.

3. I think that the most important international pressures for change in accounting during the early years of the twenty-first century would be culture, ethics, and legal systems. Cultural differences cause people to think and do things differently. It is because of these differences that people hold different ethical views. Depending on what culture a person is from, his or her perspective of society, institutions, values, laws, etc. is interpreted differently. What seems ethical and legal to certain cultures may be irrational to a stranger.

For instance, country A might be more concerned about pollution while country B worries about providing its people with the highest living standard possible. What seems legal may not seem ethical to certain people. With so much new technology and businesses in today’s world, people’s life can be said to have gotten more complicated. In fact, businesses are expected to deal with the differences in the accounting system because people will not yield their way of practices just for one business. Besides, it is hard for such a thing to happen because every country has its own requirements and so a standard accounting system is just too hard to deal with. Therefore, accounting development in the global economy should coincide with people’s opinions (culture) and laws and be prepared to adapt to changes while doing business.

4. Constraints on change are very important to national cultural differences. The majority of people do not like changes. In fact, they would even resist changes. This is because people tend to think that their culture is superior and successful everywhere. Nobody likes to be wrong. People always want to be perfect and right.

Besides they feel that their culture is comfortable and easy to adapt to. Yet, they do not consider the consequences of other people’s ideas because they were raised to accept their culture as a given fact. However, most of them do not notice that they are changing bit by bit. People are beginning to accept ideas from other cultures without realizing it. This is a result of education and technology. As people are building up their knowledge, they share information with other people from different nationalities. Thus, causing a change in culture slowly in the long run since no one knows exactly where the original information came from.

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Growing Importance of International Accounting. (2021, Jan 26). Retrieved March 1, 2021, from https://essayscollector.com/essays/growing-importance-of-international-accounting/