Question

what are an accountants global issues?

Answer 1

Following are the major global issues which are faced by accountants today:-

1) International Trade

Companies engaging in global business face some specific reporting challenges. Two of those challenges are (1) how to consolidate global subsidiaries and (2) how to account for global transactions.

2) Global Subsidiaries

When a parent corporation has a subsidiary outside of its home country, the financial statements of that subsidiary may be prepared in the "local" currency of the country in which it operates. But, the parent's financials are prepared in the "reporting" currency of the country in which it is domiciled. Thus, to consolidate the parent and sub first requires converting the sub's financial information into the reporting currency. Using which method the same is to be done and at what rate becomes a challenge for accountants.

3) Different Accounting Methods

Those companies which are dealing in the global trade have to follow the rules and regulations of the country in which it operates. Its subsidiary in any other foreign country have to follow the rules and regulations of that country. Countries may have different accounting methods for themselves. Financial statements are to prepared using those accounting methods for that country. Although accountants are not required to have complete knowledge of those country's GAAP, but he is required to have basic knowledge of the same.

4) IASB

Accounting rule makers from around the globe are scrambling to bring about global convergence of accounting techniques. The FASB has been working hard to rework certain accounting rules to match global approaches. The International Accounting Standards Board (IASB) is an international body. It issues its own accounting standards, which in many respects provide a beacon to guide the efforts going on within each country. Countries without their own standard setting body may legitimately expropriate the IASB standards as their own. Accountants are required to have knowledge of IASB because nowadays FASB requires companies to also show their balance sheet as per the standards of FASB.