The evolving role of accountants in a dynamic global discipline

¶ … Accounting has been nothing if not a dynamic, global discipline over the last two decades. The role of the accountant has changed dramatically during that time and will continue to do so -- as will the nature of the challenges that the accounting profession faces"

Over the past twenty years, the modern business community has been faced with the challenges of globalization, the new predominance of technology in business affairs, and the creation of a service-based 'knowledge economy' versus a manufacturing-based one. The profession of accounting has had to adapt to this new environment. "Business internationalization and globalization has facilitated the transfer of capital and information across national borders, with economic power residing in holders of particular knowledge sets. Business and management location is becoming increasingly irrelevant and management and accounting work is becoming multidisciplinary" (Parker 2002).

Globalization has lead to more uniform regulations in accounting. Until recently, U.S. accountants for multinationals had to understand the differences between international accounting ethics and GAAP guidelines within their own nation. However, most publically-traded U.S. companies will have to adopt international standards under current SEC (Security and Exchange Commission) regulations by 2014 (GAAP's last stand, 2011, Periso). The adoption of International Financial Reporting Standards (IFRS) even in the U.S., which formerly favored the domestic standards of GAAP, is an illustration of America's acknowledgement of the need to create a more homogeneous set of principles and guidelines worldwide.

The drive towards globalization is partially rooted in the expansion of information technology. IT has made accounting procedures more efficient than ever before -- a welcome development given complexity of modern commerce and regulations, particularly in the wake of numerous recent accounting scandals. "Information technology change is also bringing with it electronic commerce, virtual organizations, expanded scope information transfer assurance services, and the movement of business information systems professionals into advisory and decision-making roles" (Parker 2002). But technology poses a potential threat to the profession, given the lower-level accounting procedures are increasingly being adopted by non-accounting firms: "Financial planners, banks, and other finance companies are moving into the accounting marketplace, while some large and medium sized accounting practices have largely abandoned their CPA or CA designation in favor of presenting themselves as multidisciplinary business advisors" (Parker 2002).

Another notable recent change has been the embrace of what has come to be called the 'knowledge economy.' It is perhaps in this sphere, more so than any others that accounting philosophy reflects changing views about the nature of modern enterprise. For example, once human beings were regarded merely as costs rather than as assets. Since the 1970s, "largely unconcerned with valuation issues, human resource costing and accounting focused on the development of financial information that clearly communicated the significance of people as an organizational resource" (Roslender & Stevenson 2009: 857). The growing interest in intellectual capital has created a resurgence of interest in human resource-focused accounting. "During the past decade accounting for people has re-emerged as an increasingly well-subscribed research topic. It has done so as one aspect of the growing interest in intellectual capital or 'intangibles'. Intellectual capital is generally acknowledged to be divisible into three generic components: human capital, customer or relational capital, and structural or organizational capital" (Roslender & Stevenson 2009: 857).

The UK, in an effort to ensure greater rigor in accounting for the impact of human capital upon an organization's financial health issued a report called Accounting for People -- Report of the Task Force which recommended that HCM [Human Capital Management] reports focus on communicating a business's HCM policies and potential for growth. There has also been strident calls to ensure that organizations clearly explain in their annual reports how their deployment of knowledge-based assets such as labor, technology, and growth support claims for the long-term health of the organization: "a recent survey of listed companies found that narrative content formed, on average, 57% of the annual report, an increase of more than 10% since 1996" (Roslender & Stevenson 2009: 857). In the wake of the 2002 financial crisis, 'transparency' and the need to convincingly demonstrate the company's true value, logically as well as numerically, has become a vital component of almost all proposed reforms for accountants.