What is International Accounting?

The last few decades have seen a revolution in accounting standards. This increased convergence and the standardization of rules across international boundaries means accounting professionals are less limited to working in a single jurisdiction. At the same time, international transactions still often pose a host of difficulties that domestic ones do not.

International accounting is the specialty of providing accounting services that involve international business transactions. As all business becomes increasingly international, all accountants will have to be “international accountants” in order to be competitive in their profession.

Just… Accounting

You may think of international accounting as a separate specialization, something that is limited to “international accountants,” who are specially trained to handle these challenges. The reality is that the field is much more far-reaching and that any aspiring future accountant would do well to study the international issues that arise in the field.

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More International Business Means Cross-Border Accounting Problems

International problems have been around for as long as accounting has existed since there has always been a need to keep track of business deals across national borders. But it is the growth of the global economy that has brought these changes to the forefront. For example, nowadays even small business do business abroad. What do you do about currency fluctuations in you make a sale to or purchase from a foreign business? These kinds of problems are increasingly faced by accountants in all business environments.

Standardization and Internationalization

The specialization also deals with financial statements and reporting. You may one day have to work with the statement of an international subsidiary of your country which is prepared according to very different rules than the ones you are familiar with. In 2001, the International Financial Reporting Standards (IFRS) to harmonize financial reporting, but despite having been implemented in Europe, Australia, Hong Kong, and India, IFRS are still not used for financial reporting in the United States. This is just one example of how accountants need to be familiar with many different kinds regulations from different countries. So far, the SEC has resisted aligning American GAAP (Generally Accepted Accounting Practices) with IFRS, but it will happen eventually. Such a change will require financially “bilingual” accountants who are trained in and comfortable with working with both systems.

All Accounting is Becoming International

Financial accounting and analysis are not the only branches of accounting that are international. Virtually all of them have some international component. Tax laws vary widely from country to country, so any business with operations across borders will need accountants versed in international principles. Likewise, as all business increasingly becomes global, management accountants will need to base their decisions on an array of international factors.

It may seem that international accounting is a new field, but it really is not. What has changed is that today it is becoming increasingly more relevant. In the near future, virtually all accountants will have to deal with international principles in some form, and with the IFRS standards gradually being adopted around the world, all accountants will need to be versed in the field.

See also: 50 Most Affordable Small Midwest Colleges for an Accounting Degree 2016 (Bachelor’s)