A Literature Review: Challenges of Accounting in Global Organizations

This literature review explores the multifaceted challenges encountered by accounting practices within global organizations. It identifies key issues such as increased competition among accounting firms, the rapid evolution of accounting standards and regulations, and the impact of technological advancements, including remote data access and automation. The review also highlights challenges faced by organizations, including rising service costs, economic uncertainty, and the risks associated with unqualified accountants and over-reliance on online accounting systems. The study examines these issues through a comparative analysis, focusing on the perspectives of accountants and the organizations they serve. The research methodology includes questionnaires and interviews with organizations. The review concludes with recommendations for overcoming these challenges, including embracing technology, establishing clear regulatory frameworks, and fostering collaboration among organizations to ensure efficient and ethical accounting practices. The research also identifies limitations, such as the small sample size of respondents, and the potential unreliability of some references.

Challenges of Accounting in Global Organizations
Literature Review
Accounting is the process where economic information is identified, measured and
communicated so as to help in decision making by the users. Its main concern is to provide
information for the purpose of good financial decision making. (SUP, 2009)
The field of accounting is steadily going through changes, what accountants are starting to notice
a change in the services that their clients need and the effects of these changes to both of them.
In the process of Accounting both the accountants and the clients face challenges that sometimes
result in poor projections.
The purposes of the study
The main purpose of carrying our study is to identify challenges facing accounting in many
global organizations. Putting into consideration that this field is very integral in the running of
the world economy. It therefore calls for proper research and identification of problems that face
this industry and the appropriate measure of mitigation. This will ensure that the world economy
does not run into jeopardy.
Comparative analysis
Here, we shall be looking at the challenges faced by accountancy in the international
organizations . The challenges shall be separately identified and the solutions sought too.
Challenges encountered by the Accountants
 They strive to keep the clients they have and attracting new ones. This is hard on them
because of the increased competition from different Accounting firms around the globe.

 The ever-changing standards and regulations of the Accounting world. It is becomes
difficult to keep up with the regulations and the standards.
 Another problem is the increased competition among the accounting firms globally. This
has been occasioned by the entry of new players in the market. To keep up with the
competition, the firms reduce their fees to the clients thus resulting in financial problems
within the firms.
 The continued Technological change such remote access of data and advancement in the
accounting sector has been a problem to old players in the industry. The new entrants
have employed he use of advanced technology which is sometimes challenging to their
competitor to keep up. As book keeping becomes more and more automated, accountant
need to keep up with these changes through regular training, this in turn cuts in their
budget. economia.icaew.com, (2016). Features.
 Poor professional regulation structures has seen unqualified accountants attending to
clients. These have in turn tainted the named of qualified accountants because they have
offered sub standards of not do good services.
Challenges encountered by the Organizations
 There is continued rise in the cost of the services offered by the accountants. This has
been exhibited in East African countries and the Middle East. ifac.org, (2015) The
economic uncertainty that faces the organizations make them see no benefit in requiring
accountancy services.
 The organizations too face the challenges of being served by unqualified accountants.
These pose a big threat on the financial positions and advice to the organizations . The

organizations end up making poor financial projections which in turn hurt their
businesses and reputations in terms of paying taxes and declaring their financial
positions according to the requirements by the law.
Conclusion
In order to overcome the challenges and the gaps in accounting, the global organizations need to
put the following into consideration:
 Embracing of technology as it changes. This will ensure that the organizations’’
accounts are in line with the technological advancement . The technology will also
enhance the security of and safety of data and information.
 The Accounting industry regulators need to come up with clear and streamlined
regulations to ensure that all the players in the field transition smoothly without
having to cause misalignment with the organizational structures of the organizations.
 The new entrant accountants need to have the necessary skills which should also be in
line with the needs of different organizations . the knowledge also needs to be in line
with the technological policies of the target organizations.
 The global organizations need to work as a team as far as accounting is concerned so
that they all are at per with the changing trends in accounting sector. Because some of
the organizations are more technologically advanced that others . Those with advance
accounting technological infrastructure need to work together with those not well
tuned to the changing and advancement of technological trends . This working

together will ensure that there are minimal problems arising in the organizations in
the accounting departments. Thus, more efficiency in accounting..
 There is an urgent need for putting a structure that will be adhered to by both the
trained and untrained accountants. This will ensure ethical service delivery.
Business Research Proposal
Introduction
The accounting world has been experiencing rapid changes that come with challenges. The
changes have affected and caused stress to some accounting firms and individuals. The changes
however, have reduced revenues causing the firms and individuals in accounting to come up with
measures to mitigate the situation. The challenges have also led a reduced customer base.
(Economia, 2016)
It is therefore obvious that from the challenges arising, there is need for more developments and
adjusting to the changing trends in accountancy by the industry players. There is need for
diversification of approaches used in this field.
The Project Scope
Project Objective
To identify the challenges of Accounting in Global Organizations
Data collection method
Administration of a questionnaire to the organizations, who were the respondents, to
identify the real issues and challenges facing accounting in Global Organizations.

Timeline
 Preparation of questionnaires
 Administration of the questionnaires
 Carrying out interviews
 Compilation of the report
Challenges expected
 Limited time for the research
 Some respondents might not cooperate
Literature Review
Factors like new individuals entering the field of accounting, new and more advanced methods
of accounting in the market and the changing of expectaions from the accountants by their clients
shows that the sector of accounting has changed a lot. The researcher seeks to highlight some of
the challenges in accountancy.
Research Questions/Hypothesis
 Primary Question
o What are the challenges facing accounting in global organizations today? Secondary Questions
o How have the challenges affected the concerned organizations?
o What is the effect of the challenges to the global economy?
Methodology

The researcher wants to find out how the changes in the field of accounting and the challenges
emanating from the changes in relation to accountancy in global organizations. We also seek to
discover what organizations are noting from the changes and how the challenges are affecting the
daily operations of the organizations .
Technology changes everyday, rules and regulations that govern accounting change too and this
makes it expensive to Global Organizations as much as accounting is concerned. (Mitten M. ,
2016)
As times keep changing, there is reduced trust in most financial institutions, but accountants
remain to be a vital source of financial advice to many businesses and individuals. As the trust in
financial institutions dwindles, accountants need to be aware of the challenges that face them in
the present day. The challenges identified in the research from the ten respondents used by the
researcher include:
Semi qualified accountants
As there has been a huge demand of accounting services, the cropping up of not so well qualified
accountants has become a serious problem to the Global Organizations which need the
accountancy services. This has resulted in loss of trust in most accounting firms by the
organizations that need the accountancy services. This has necessitated the organizations to
resort to websites and software that provide accountancy services.
With not so strict rules and regulations in the accounting sector, can call themselves an
accountant without the needed level of training, it is a requirement for them to go through
training and pass their exams so as to be subject to professional conduct and rules. We need to

note that semi qualified accountants do not have the proper skills and end up giving misleading
advice to businesses which in turn risk running into crises. Bad advice given taints a bad
reputation to the industry and affects its growth and development.
Use of advanced software and online technologies
The global organizations who are have lost trust in accountants are choosing to do it for
themselves. The penetration and advancement software and online technologies makes many
firms to use software accounting instead of having to employ accountants
Some organizations might not see the need of hiring a qualified accountant because they want to
reduce costs and might have lost trust in accountants altogether. Over six qualified accountant
respondents said the introduction of advanced software and online accounting services has made
them lose a considerable number of clients. 60% of them affirmed that the introduction of new
technologies have largely affected the accounting industry. (Frederiksen, 2017)
Increased over reliance on online accounting technology
Many Global organizations have taken up cloud accounting software and online accountancy.
This has resulted in to over dependence on the online services. As technology keeps advancing,
the data and information that belong to different Global Organizations are prone to attacks from
cyber criminals. These criminals would penetrate the confidential data owned by different
organizations and they might corrupt, delete or get the data for malicious use. This puts the
organizations in a limbo as they might not be in total control of their accounting systems. He
exposure of this data and information could also lead to thefts in the organizations.. (Frederiksen,
2017)

Service value addition
The Organizations that are looking for firms that can offer services in addition to services
requested. This makes the firms strive for a way to do value addition to the services offered. This
value addition is usually expensive to some global organizations.
METHOD OF COLLECTING DATA
In this case the researcher used Questionnaires which were administered to ten identified
organizations. The researcher also intents to carry out interviews amongst the concerned
members in the target organizations.
SAMPLING DESIGN
The researcher has identified 10 respondents as the sample population of the respondents.
. Ten questionnaires will be administered to the respondents. The interview survey technique will
be used to collect the secondary data
Data analysis
The total number of respondents was ten
1. Do your organization find the need to hire external accountancy services?
o 60% of the respondents were willing to take up accountancy services if assured
the security of the data and information.
2. Is your organization satisfied with the system of accountancy that is currently in place in
your organization?

o Only 20% of the organizations were satisfied with the system of accountancy that
was currently in place in their organization
3. Does your organization use online software and accounting system
o 62% of the respondents said they were using the online accounting system so as to
keep up with current trends in the accountancy systems.
4. Does the accounting system in place currently in your organization live up to your
expectations?
o Only 40 % of the respondents were content that the current financial
organizations were contented with the current accountancy systems in their
organizations.
5. Do you think that the online accounting system is the best for your organization?
o 100% affirmed that the online accounting system was the best for their
organizations and that they were willing to take it up.
6. Does your organization face challenges of accounting?
o 100% of the respondents said their organizations face immense challenges in
their system of accountancy and that they would need to re-look into them. .

The questionnaire consists nine questions which will help in drawing up the trends, expectations
and the extent accounting challenges faced by the global organizations. The questionnaire also
will draw up conclusions and help the organizations choose a better accounting system and how
thay can overcome the challenges being faced.
Limitations identified in the research
This research could have limitations as listed below.
 The size of the respondents was small, this could not have given a clear picture of what is
portrayed on the ground. As this data and information could be used in different places
for the purposes of prevention of challenges faced by the global organizations.
 The data in the references might not be as reliable as one would need it to be. This could
lead them into making poor projections of the challenges being faced by the global
organizations and how they can be overcome. (Stephanie, 2015)
 This topic does not have wide research information for further reference it therefore calls
for increased research into this discipline so as to have varied opinions on the same.
 The method used to collect data could be limiting as it does not touch conclusively on all
aspects of the problem statement. Those wishing to use this as a reference material need
to employ other methods of data collection so as to have a conclusive and a wider view of
the problem stated. The respondents could not have given as accurate information it is therefore prudent to
carry out more research involving more and wider scope of respondents so as to have a
deeper insight on the same. (Price, 2017)
Time Schedule

Task Date
Taking the draft proposal to the supervisor
Taking the letter of approval to the office of
research
Collecting of data for the research
Compiling and analyzing the data collected
Revising the findings of my research
Preparation of a draft report together with my
supervisor
Submission of my final research report
Conclusion
The common global organizations are facing a lot of challenges as afr as accounting is
concerned. The global organizations need to come up with proper measure to mitigate this
situation before it goes out of hand. The challenges need collective efforts and it can be easy to
handle them. The integration of modern technology in accounting could help the global
organizations in overcoming this problem of accountancy. The global organizations need to
come up with a system of accountancy that would incorporate them working together so as to
over come the challenges emanating from working as single entities. This would also help in
bridging gaps in their accounting systems. The organizations also need to have frequent trainings
on the changing trends of accountancy globally.

If these are put into consideration , then the global organizations will be having very minimal
challenges in the accounting systems.
Reference List
1. Mitten, C. (2009, Augus 20). Econimia. Retrieved from icaew.com.
2. Frederiksen, L. (2017, August 21). hingemarketing.com. Retrieved from
hingemarketing.com.
3. Mitten, C. (2010, October 14). Econimia. Retrieved from icaew.com.
4. Mitten, M. (2014, October). icaew. Retrieved from economia.
5. Price, J. (2017, September 22). usc.edu. Retrieved from http://libguides.usc.edu.
6. Silignasis, K. (2008). Reasearch. Crete.
7. Stephanie, B. (2015, July 26). libguides.edu.
8. SUP. (2009). Management Accounting. Nairobi.
9. surrey.ac.uk. (n.d.). Retrieved from libweb.com
10. Stephanie, B. (2017, June 30). libguides.edu.
11. SUP. (2011). Management Accounting. Nairobi.
12. Economia.icaew.com, (2016). Features.
13. Ifac.org, (2015) Press Release.

14. Mohamed, E. (1975). Accounting Knowledge and skills and the Challenges of a Global
Business Environment. 7th ed. [pdf] Muscat MCP UP Limited.
15. Aden, M. (2009, October 14). Econimia. Retrieved from finance.com.
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Appendix
Questionnaire
1. Do your organization find the need to hire external accountancy services?
YES
NO
2. Is your organization satisfied with the system of accountancy that is currently in place in
your organization?
YES
NO
3. Does your organization use online software and accounting system
YES
NO
4. Does the accounting system in place currently in your organization live up to your
expectations?
YES
NO
5. Do you think that the online accounting system is the best for your organization?
YES
NO
6. Does your organization face challenges of accounting?
YES

NO
7. Does your organization have a plan to employ a new system of accounting?
YES
NO
8. Does your organization work with other global organizations to help curb the challenges
of accounting?
YES
NO
9. Is your organization concerned by the safety of the data as far as accounting is
concerned?
YES
NO
10. What are you future plans of accounting
o going for online cloud accounting
o having the manual accounting system with no computer assistance
o hiring an external accountant