The Internet and globalization have extended access to trade all over the world including developing nations as we are connecting more than ever. Information technology allows business transactions internationally and the accounting within different countries faces many challenges due to cultural lags. Developing nations’ aligning with international accounting standards struggle as trade, investments, employees and supplies across borders increases with accessibility. President of the Interamerican Accounting Association (2006) and Katherine Schipper, Thomas F. Keller, Donna Street (2014) explain the difficulties developing nation have with universal acceptance. To help guarantee financial information is reliable and comparable, Deloitte IAAER scholarship program and the International Federation of Accountants have donated time, money and mentors towards economic development.
An Interview with former President of the Interamerican Accounting Association, Pierre Barnès, displays the many challenges faced by developing nations to stay current with the accounting profession today. Barnès describes how globalization has today’s companies finding their top investors, customers, partners, suppliers and employees are international (International, 2006). The speed and availability of information that is processing and connecting with technology may be challenged in parts of the world. Challenges in the developing world include restrictive trade policies that limit their growth potential, lack of basic infrastructure development, lack of access to investment capital and political and corporate level of governance issues (International, 2006). These challenges have resulted in mostly small and medium-sized companies who struggle with the cost benefit of adopting international financial reporting standards. Barnès clarifies the international financial reporting standard caters more toward large transnational accounting firms (International, 2006). Translations, linguistic and cultural difference can make key accounting concepts in the international standard not universal.
Corporate crimes like Enron are supplying globally high standards of accounting practices in all parts of the world (International, 2006). If developing nation adopt the international standards it can ensure information is comparable and update with the rest of the world while saving on the creations of local or regional standards. But with the lack of resources with the accounting professions education programs and certification standard may not meet international expectation (International, 2006). Professor Katherine Schipper, et al, describe how the textbooks may out dated and based on local standard and some universities that have adopted international accounting standards lack the ability in preparing accountants of today and the future (2014). There are not many opportunities to find mentor to prepare the accountants for research and development. Developed nations have to compete with developed countries to stay relevant in publications of research in international journals but are not prepared either (Schipper, 2014). These scholars need assistance in their development from accounting professional of their own countries and accomplished researchers in other countries too.
The Deloitte IAAER Scholarship Program invites five accounting scholars from Brazil, Indonesia, Poland, Romania, and South Africa (Schipper, 2014). The scholars receive a mentor, a researcher and a senior accounting instructor who will aid in their professional development. Scholars will attend workshops where they gain a better idea of how the accountancy profession is developing around the world through hands-on learning experiences and built networks (Schipper, 2014). During the program the scholars will also attend research and teaching sessions, present papers and in the development and expansion of their networks.
Schipper explains the goal of The Deloitte IAAER Scholarship Program is collaborating academic and professional accounting to fully develop a prepared individual ready to meet professional demands (2014). Implementing this program is a necessity to help address the vital need to strengthen accounting research and teachings in developing countries. The long-term benefits in the accounting, auditing and financial reporting of the developing nations are attainable as the program will increase the teaching and researching standards (Schipper, 2014). Endorsing five scholars is a start but developing nations need support from other sponsors and mentors.
Cohn describes additional support from the International Federation of Accountants, who are partners with the U.K. Department for International Development, for the growth of professional accounting throughout developing countries (2014). The U.K. Department for International Development will offer almost eight million dollars to International Federation of Accountant over seven years. The money will fund at least ten countries that need economic development (Cohn, 2014). International Federation of Accountants plans to coordinate organizations that will ease capacity-building professional accountancy organizations. Also, they plan to supervise the projects including peer-to peer support by professionals to build managerial, financial and technical capacity(Cohn, 2014).. International Federation of Accountants efforts promises to help accountants in developing countries come together for the advancing the profession and ethical standards.
The world is noticing the accounting profession and expanding the standards between developing nations is a priority of the profession. Business organizations are thriving off of international commerce, employees, investors and supplies. Without developing international standards to developing nations it will put the accounting profession at risk. Developing nations need skills, knowledge and support from experienced scholars with current standards. The Deloitte IAAER Scholarship and International Federation of Accountants, funded by U.K. Department for International Development, have begun rising the accounting, auditing and financial information standards in developing countries. With added support and funding from developed nations, the developing world will produce uniformly high standards, comparable and reliable information.
Cohn, M. (2014, October 3). Strengthening Accounting Organizations in Developing Countries. Retrieved March 3, 2016, from http://www.accountingtoday.com/blogs/debits-credits/strengthening-accounting-organizations-in-developing-countries-72243-1.html
International Accounting Issues . (2006, May/June). Retrieved March 3, 2016, from http://www.cga-canada.org/en-ca/aboutcgacanada/cgamagazine/2006/may-jun/pages/ca_2006_05-06_ft2.aspx
Schnipper, K., Keller, T. F., & Street, D. (2014, August 19). Issuing a Challenge to the Profession: Preparing Today’s and Tomorrow’s Educators and Researchers in Emerging Economies. Retrieved March 3, 2016, from https://www.ifac.org/global-knowledge-gateway/viewpoints/issuing-challenge-profession-preparing-today-s-and-tomorrow-s