Analyzing Accounting Challenges in Global Business Environments

This report investigates the challenges faced by global organizations in implementing and maintaining effective accounting practices. It begins with an introduction to the importance of accounting in finance and its role in maintaining business profitability and global reputation. The report then outlines the project objectives, which include evaluating the challenges, understanding the impact of accounting on performance, and providing recommendations for improvement. The scope of the project focuses on issues such as the lack of technological skills among employees, challenges in complying with diverse tax regulations, and the need for employee flexibility in handling data. The literature review covers previous studies on accounting's impact on global organizations, emphasizing the importance of accounting in crisis management and the role of international accounting regulations. The report also highlights the challenges of accounting in global organizations, including different regulations, difficulty in finding efficient employees, internal change issues, and technological problems. It concludes by summarizing the key findings and suggesting potential strategies to overcome these challenges.

Running head: BUSINESS RESEARCH
Business Research
Name of the Student
Name of the University
Authors’ Note

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Table of Contents
1. Introduction..................................................................................................................................2
2. Project Objective.........................................................................................................................2
3. Project Scope...............................................................................................................................3
4. Literature Review........................................................................................................................4
5. Conclusion...................................................................................................................................6
Reference List:.................................................................................................................................7

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Topic: Challenges of Accounting in Global Organizations
1. Introduction
Accounting is one of the most integral parts of finance with the help of which an
individual intends to identify record, measure and classify the financial information in order to
maintain proper database in business profitability. Providing a good quality of services as well as
products to the customers is not the only responsibility for a business organization for gaining
international image and reputation. The business experts in order to maintain a global business in
different geographical locations should focus on business profitability as well as employees
performance. Accounting is the systematic way of maintaining both internal as well as external
data record with the help of which the entire performance level of the organization can be
evaluated. In this specific study the primary concern is to evaluate some of the major challenges
that business experts are facing at the workplace while implementing accounting within their
business process.
2. Project Objective
This specific study aims to evaluate the challenges of Accounting in Global
Organizations. The primary objectives of this particular study are as follow:
 To critically evaluate the challenges and barriers that business experts have to face while
implementing accounting within global organization
 To critically understand the overall impact of accounting in enhancing the overall
performance level of the global organization’

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 To provide some of the major recommendations on how those identified challenges can be
overcome by implementing necessary business strategies as well as policies
3. Project Scope
It has been observed that in last five years global business organizations intend to
maintain entire process of database by using accounting software for maintaining a proper
accuracy within data and information. After the implementation of accounting within the
organization global business organizations are facing several challenges in maintaining a proper
data record due to some important reasons (Hodges 2012). One of the most raising issues that
global organizations are facing currently ensures the lack of technological skills. Large number
of senior employees is associated within the global business organizations that are not
compatible enough in maintaining financial data record with the help of software. As a result,
those kinds of employees are facing innumerable difficulties in providing services within proper
time. As a result, the entire flow of business is getting slow day by day.
In order to run an international business the entire structure of tax compliance system is
very much crucial. The finance executives have to follow different tax systems, tax rate and
compliance requirements (Guthrie, Burritt and Evans 2012). In this kind of situation the finance
executives have to face innumerable challenges while following the tax regulations of different
geographical countries. Accounting is the key to maximize revenue. The entire data storage
procedure is maintained systematically and chronologically only when people are flexible
enough in operating data. An effective issue has been identified on behalf of the practitioners that
employees are not very much flexible in handling overall database due to the lack of
technological efficiency (He, Wong and Young 2012). In this kind of situation, the global

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business organizations are facing innumerable challenges in maintaining their entire process of
business in the global market.
4. Literature Review
4.1 Previous literature review
Balakrishnan, K., Watts, R. and Zuo, L., 2016. The effect of accounting conservatism on
corporate investment during the global financial crisis. Journal of Business Finance &
Accounting, 43(5-6), pp.513-542.
The article highlights the importance of accounting on a global basis. The purpose of this
article was to examine the relationship between accounting and the crisis. This paper critically
analysis that may be the implications of accounting must not be properly done on a global basis
but accounting plays a very influential role in every organization on a global basis. The
accounting development is mostly done in response to the economic pressure within any
organization but after enabling accounting system in the organization, it emancipates the further
development of the organization. This article reviews the importance of accounting on a global
basis until the year of 2012 and states that on global context the transformation of accounting
system is based on many factors, which are the social and political pressures. Through this
article, we get to know the necessity of accounting in global organization, which is that
Accounting helps every organization on a global basis to keep records of all the monetary
transactions. The international accounting regulation is the sole regulation that helps in the
incorporation of the accounting database in every organization. This article also discusses that
the accounting system of every organization is the set of records that helps the organization in

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crisis management and experience a better financial environment within the organization. In this
article, it is found that accounting rules seems to be very critical at the time of credit crisis and
this is marked as a very reinforcing factor in the crisis period. From this article, this can be
known that there is a vast importance of accounting in global organization and for the chosen
topic; this article will help in determining the importance. This article does not clearly identify
the reason behind the importance of accounting in the global context, which is necessary as
having the reason will help the system to be updated with the changing demographics of the
world.
4.2 Importance of accounting on global organization
Accounting on a global basis facilitates the international financial regulatory framework
and globalization on the other hand is very important issue that has grabbed the hold of the
economic state of the world (Beatty and Liao 2014). Implementing of accounting system in the
organizations has rendered a profit for the business experts and that is the maintenance of a
proper data and information with the help of accounting software. The emerging global system
would have failed if accounting was not a part of the organization and that is why the board of
the international accounting standard has initiated the development of the accounting system on a
global basis (Hall and Lawson 2014). This is to incorporate the set of rules, which are
understandable and transparent and have no problem in incorporating the system in organization
to have the records of the financial statements. Accounting is an effective key, which helps in
maximizing revenue. The data storage procedure of accounting is maintained systematically and
chronologically only when people are flexible enough in operating data. However, the employees
face an effective issue has been identified on behalf of the practitioners that employees are not

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very much flexible in handling overall database due to the lack of technological efficiency
(Apostolou et al. 2015).
In this kind of situation, the global business organizations are facing innumerable
challenges in maintaining their entire process of business in the global market. After the
implementation of accounting system within the organization global organizations, it is seen that
they are facing several challenges in maintaining a proper data record due to some important
reasons. One of the most disturbing issues that global organizations are facing currently ensures
the lack of technological skills. There are large number of senior employees who are associated
within the global business organizations but they are not still comfortable enough to maintain the
record of the financial data with the help of accounting software (Baker, Bloom and Davis 2016).
The reason behind why the global organization needs incorporation of accounting system is to
note the movement of the funds of the organization in the capital market. This is because in order
to maintain the organizations capital recorded properly, every organization needs to have a
record of their economic performance. This will keep the account of the economic transaction of
the organization for the crisis period (Cingano 2014). The accounting system is a costly process.
Many countries are seen to upgrade their national accounting standards to the international
accounting standards to avoid any future crisis while being a part of the global market. There are
still many organizations that fail to keep the actual records of the company’s transaction and
faces many problems (Claessens 2015). Hence, it is recommended that all the company should
have the record of their transaction so that they can be efficient enough to dwell in the global
market. The accounting system will help them to have their own records which will lead to
increase in profit and for the employees who are not efficient enough to keep the records,

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training must be conducted so that they can be aware of the fact about how to keep the records of
the transactions (Lusardi and Mitchell 2014).
4.3 Challenges of accounting on global organization
As emphasized by Bebbington, Unerman and O'Dwyer (2014), numerous business
experts have faced innumerable challenges in using accounting within the global business
organization. This particular scholar believes that a financial reporting system with the support of
proper governance, sound regulatory system and systematic auditing system is the key way for
economic development. Business executives who are associated with the finance department
should know how to operate accounting for maintaining a systematic financial transaction.
However, in order to run the entire process of business global organizations have faced
innumerable challenges in maintaining a proper financial record properly. The challenges are as
follows:
 Different regulations and legislations:
Papaspyropoulos et al. (2012) Tax regulation varies from one country to another.
Business experts have to follow different forms of tax legislation belonging to different
geographical countries. While maintaining the financial record the finance executives should
have an in-depth overview about the taxation policies. Based on the regulation the fiancé
executives have to maintain database. Therefore, the business executives have to get an in-depth
overview about the tax rate policies of different countries for maintaining the data record. In
most of the cases business executives do not have detailed knowledge about the taxation policies.
Automatically, maintaining a systematic data record on the overall business process has become
a major issue for the finance executives.

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 Finding efficient people
In order to become an eminent part of the finance department an individual should have
finance background with efficiency in technology. It has been observed that organizations have
to face challenges in hiring efficient employees for maintaining the entire financial data record.
Roman, Roman and Meier (2014) opined that senior employees who are already associated with
the business process are not efficient enough in operating accounting with the help of advanced
technology. In this kind of situation, the business experts are facing innumerable challenges
maintaining a global business. This particular study has focused to evaluate some of the major
challenges of accounting on global organization. As per the opinion of Guthrie and Parker
(2014), organizations can implement a training and development session for employees in order
to enhance their technological skill. Otherwise, the entire business process can face a massive
consequence in handling the entire situation.
 Internal change issues:
Zeff (2012) stated that organizations are facing innumerable challenges in managing
internal data properly. Business executives associated with the finance department are not
efficient enough in maintaining data record by using accounting software. As a result, the
employee performance as well as remuneration record is not marinated properly. Employees are
getting deprived of receiving their justified salary as well as incentives properly. In this kind of
situation the entire internal structure is getting hampered day by day. Employees are facing
issues in receiving their remuneration properly. The lack of motivation is happening at the
workplace of global organizations. Automatically, the rate of employee turnover is getting high
day by day.

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 Technology issues:
Bayerlein (2015) opined that maintaining financial database with the help of accounting
is highly dependent on technology. If an individual employee has to face a technological error
the entire process of business becomes worthless. In this kind of situation, the customers and the
employees show the reluctant attitude in being associated with the organization. Due to the
technological error the business experts may have to face difficulties in evaluating the
organizational profitability. At the same time, the overall performance record of the employees
has already been lost due to sudden technological barrier (Schaffartzik, Wiedenhofer and
Eisenmenger 2015). This particular issue is a serious concern for the business experts for
maintaining global organization systematically.
4.4 Literature gap:
The previous article critically discusses the importance of the accounting system in any
organization based on global market and it largely influences the using of accounting system in
the organizations but the portion this lacks is to provide the brief idea about why the
incorporation of accounting system is important in every organization. This study further
highlights the reason behind the incorporation of accounting system in every organization and
highlights the importance of it in global perspective. Hence, it can be said that over the years the
process of accounting system has evolved along with increasing its need in the global sector.
4.5 Summary:
From the above it can be seen that earlier the importance of accounting was seen but the
reason behind that was unknown and with changing years the reason has been known. However

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with due course of time, now it can be said that the reason behind the incorporation of
accounting on global basis is that every organization needs to have the record of their financial
statements so that it helps them to use their capital according to their needs. Accounting helps
every organization to have the full records of the monetary transaction and helps the organization
to utilize the capital as per its need.
5. Conclusion
The entire study has provided an in-depth overview about the necessary challenges of
accounting that global organizations have to face for running their entire process of business
systematically. With the rhythmic progress of globalization the necessary demands as well as
employees are changing gradually. Therefore, implementation of accounting within the business
process has rendered a privilege for the business experts in maintaining a proper data and
information with the help of accounting software. While evaluating the entire research issue the
study has decided to focus on major challenges in implementing accounting software for
maintaining financial record.

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Reference List:
Apostolou, B., Dorminey, J.W., Hassell, J.M. and Rebele, J.E., 2015. Accounting education
literature review (2013–2014). Journal of Accounting Education, 33(2), pp.69-127.
Baker, S.R., Bloom, N. and Davis, S.J., 2016. Measuring economic policy uncertainty. The
Quarterly Journal of Economics, 131(4), pp.1593-1636.
Bayerlein, L., 2015. Curriculum innovation in undergraduate accounting degree programmes
through “virtual internships”. Education+ Training, 57(6), pp.673-684.
Beatty, A. and Liao, S., 2014. Financial accounting in the banking industry: A review of the
empirical literature. Journal of Accounting and Economics, 58(2), pp.339-383.
Bebbington, J., Unerman, J. and O'Dwyer, B. eds., 2014. Sustainability accounting and
accountability. Routledge.
Cingano, F., 2014. Trends in income inequality and its impact on economic growth.
Claessens, S., 2015. An overview of macroprudential policy tools.
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Guthrie, J., Burritt, R. and Evans, E., 2012. Challenges for accounting pathways in Australia in
2012: an introduction. Emerging pathways for the next generation of accountants, 9.

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Hall, J.C. and Lawson, R.A., 2014. Economic freedom of the world: an accounting of the
literature. Contemporary Economic Policy, 32(1), pp.1-19.
He, X., Wong, T.J. and Young, D., 2012. Challenges for implementation of fair value accounting
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Hodges, R., 2012. Joined‐up government and the challenges to accounting and accountability
researchers. Financial Accountability & Management, 28(1), pp.26-51.
Lusardi, A. and Mitchell, O.S., 2014. The economic importance of financial literacy: Theory and
evidence. Journal of Economic Literature, 52(1), pp.5-44.
Papaspyropoulos, K.G., Blioumis, V., Christodoulou, A.S., Birtsas, P.K. and Skordas, K.E.,
2012. Challenges in implementing environmental management accounting tools: the case of a
nonprofit forestry organization. Journal of Cleaner Production, 29, pp.132-143.
Roman, C., Roman, A.G. and Meier, E., 2014. The challenges of accounting profession as
generated by controlling. Theoretical & Applied Economics, 21(11).
Schaffartzik, A., Wiedenhofer, D. and Eisenmenger, N., 2015. Raw material equivalents: the
challenges of accounting for sustainability in a globalized world. Sustainability, 7(5), pp.5345-
5370.
Zeff, S.A., 2012. The Evolution of the IASC into the IASB, and the Challenges it Faces. The
accounting review, 87(3), pp.807-837.

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