The role of modern accountants in corporate and global business

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In many ways, the role of the modern accountant in corporate and global business has substantially changed from that in previous times. The effects of globalization are ever increasing; thus, it is necessary for accountants to be cognizant of global developments more than ever. Additionally, the financial crisis of 2008 has resulted in significant regulations that have changed the way that accounting is practiced to include a greater degree of transparency for all parties involved: company representatives, stockholders, and regulators. Due to these developments, one can argue that the role of the accountant has never been more important than it is in contemporary society, especially when one considers that in addition to newer developments accountants are also charged with the primary responsibilities that they have always had.

From an extremely pragmatic standpoint, accountants are vital to the operations side of national and international corporations, for the simple fact that these practitioners are the ones who provide insight into the pecuniary prowess -- or lack thereof -- of a particular organization. Accountants must keep track of costs, revenues, profits, and taxes in order to enable an organization to be aware of how to modify or maintain its operations. Accountants are actually invaluable in this respect, because without their work management would not know how to properly utilize its myriad resources.

It is largely due to this fundamental responsibility at the very heart of an organization that there is a strong ethical aspect of the job of accountants in large corporate entities. As the example of the Enron scandal at the start of last decade demonstrates, the financial accounting of an institution can drastically affect the decisions and livelihoods of a number of individuals (Valdmanis, 2008). Due to the fictitious practice of a perverse version of marked-to-market accounting, Enron was able to fool a number of different representatives of the national economy which included the Securities Exchange Commission (which initially gave it permission to use this accounting methodology for a limited use that the company expanded to include all of its accounting practices), management, and millions of stockholders. Indirectly, of course, the ramifications of this chicanery and perversion of accounting ethics was responsible for increasing the vaunted stock of this company. Therefore, it is highly significant that when this particular company went bankrupt (which virtually no one could foresee because of the faulty accounting it utilized) it not only destroyed the livelihoods of all of its myriad employees, but it also plummeted the lot of its stockholders -- many of whom were those same employees who the company had induced to invest their pensions and retirement funds in the company's stock.

All of these horrors, however, could have been prevented by ethical accounting practices. Such practices include the fact that there are no 'gray areas', and that what is desired is full transparency of money coming in and out so that people can manage the company and their lives accordingly. Other accounting ethics include conventional ethical principles such as Immanuel Kant's categorical imperative (Guthrie, no date) and utilitarianism, as they specifically apply to situations with national and international corporations. Additionally, accountants have an obligation to report their methods and principles used in accounting to regulatory agencies such as the SEC and others. Most of all, perhaps, they have an ethical responsibility to turn over their books to these regulatory agencies upon demand, to ensure that ethical accounting standards are fully being met.

Accounting principles are certainly complicated by global business practices, in which it is quite frequent that international companies will have a headquarters office and several subsidiaries around the world. There are a number of cultural differences one must take into consideration when working in international settings (Nohria et al., 2009, p. 37). Although various accounting jobs are stratified into different categories, one of the things that accountants must beware of is the fact that different countries have different tax codes. Thus, an organizations assets and liabilities have the potential to vary based on where it conducts business. As such, accountants have a very important role in facilitating the most advantageous way to conduct business from a monetary standpoint. By extension, this principle also applies to various employees (such as upper level management CEO's and the like) who may have a permanent address in one country yet conduct most of their business -- and earn most of their money -- in a totally different nation. Accountants can aid them and their surrounding organization with most beneficial means of complying with tax codes in multiple countries, as well as ascertaining what potential tax cuts or exemptions a country can be eligible for.