Accounting and Globalization Essay

3470 WordsOct 2, 200614 Pages
INTRODUCTION As today's companies become more globally oriented and expand into multinational corporations, there is a growing need to compress financial regulations into a homogeneous unit. To achieve this homogeneity, accounting practices in the modern economic market must strive for a symbiotic relationship with globalization. Because consumer capitalism has spread to non-originating countries, and non-Americanized cultures, the practices of accounting and financial management must standardize their policies. Thus, accounting must be regarded beyond capital market settings, and the different effects that accounting has had in such sites must be examined. WHY ACCOUNTING IS CHANGING GLOBALIZATION Since leading companies have…show more content…
softwood lumber dispute (Graham & Neu, 2003). At the center of this dispute is the method of calculating producer costs—a concern of both managerial and financial accounting (Graham & Neu, 2003). Because of the centrality of the notion of cost within trade-resolution procedures, accounting operates on an embedded technology to arbitrate and allocate the materials of such disputes (Bottom & Simons, 1990, as cited in Graham & Neu, 2003). It is further interesting to note that accounting has a forward and downward "trickling" motion in such episodes (Graham & Neu, 2003). Accounting trickles forward in that it structures and constrains subsequent government policy-making procedures in other arenas, also acting as a precedent for other countries, in the scope of the World Trade Organization (WTO) dispute resolution mechanisms (Graham & Neu, 2003). As accounting trickles downward, it impacts the producers and employers that manufacture products, as well as the consumers who purchase such products (Graham & Neu, 2003). By this type of financial arbitration, accounting is implicated internationally in both the regulation of product flows and the standardized costing practices. FLOWS OF INFORMATION How accounting regulates and structures the flow of information is rather vague. Information transfer, more visible on the Internet, is relatively unstructured and unregulated in current accounting practices (Graham & Neu, 2003). However,
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