Challenges in Accounting within Global Finance: A Comprehensive Report

This report delves into the intricate challenges of accounting within the context of global finance. It highlights the increasing complexities faced by financial professionals due to globalization, including the need to navigate diverse international regulations, currencies, and taxation policies. The report emphasizes the importance of understanding global trends, adapting accounting practices, and identifying key challenges to ensure accurate financial reporting and effective decision-making. It covers topics such as green accounting and harmonization while also addressing the ethical and moral considerations that accountants encounter in a globalized environment. The methodology includes both qualitative and quantitative research approaches, incorporating direct observation, questionnaires, and interviews to gather comprehensive data and analyze the behaviors and perceptions of accountants. The paper aims to provide insights into the challenges and potential solutions for global finance accounting, offering valuable strategies for companies to optimize their operations and maintain a competitive edge.

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CHALLENGES IN ACCOUNTING IN GLOBAL FINANCE
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1CHALLENGES IN ACCOUNTING IN GLOBAL FINANCE
Executive Summary
Finance accounting is one of the most important aspects of business operations that help
organizations to make decisions regarding budget and cost structure. Accounting helps an
organization to effectively understand its position in the industry and their internal situation
based on economic condition and this facilitates it key decision making strategies. Financial
accounting in the global context has become a very tricky and challenging aspect in the business
operations of today simply because companies have to bear in mind a lot of rules and regulations
from various countries across the globe. These challenges need to be correctly and efficiently
identified and solutions need to be come up with. The following report would like to take a
deeper look into these problems and try to provide ways that would help to do away with the
challenges and make the accounting process smoother.

2CHALLENGES IN ACCOUNTING IN GLOBAL FINANCE
Table of Contents
Introduction......................................................................................................................................3
Project objective..............................................................................................................................3
Project scope....................................................................................................................................4
Literature review..............................................................................................................................4
Green accounting:........................................................................................................................6
Harmonisation:.............................................................................................................................6
Literature gap...................................................................................................................................6
Hypothesis.......................................................................................................................................7
Research design...............................................................................................................................7
Qualitative research:....................................................................................................................7
Quantitative research:..................................................................................................................8
Research limitations.........................................................................................................................9
Time schedule..................................................................................................................................9
Conclusion.....................................................................................................................................10
References......................................................................................................................................12

3CHALLENGES IN ACCOUNTING IN GLOBAL FINANCE
Introduction
The primary functions of financing have always been trying to control costs, making and
maintaining proper budgets. Finance department of any organization is laden with the task of
planning a budget which will dictate the financial transactions and operations of the companies.
Another important role of finance is internal auditing. This is an essential aspect of business
running, which ensures the organisations are operating in a correct manner (Burns & Needles,
2014). However, in the age of globalization, as organizations are expanding rapidly and are
operating business overseas the finance departments and auditing firms are being faced with new
and more intricate challenges every day. Their tasks and responsibilities transcend from being
burdened with simple capital structure making to profit repatriation policies of the company’s
subsidiaries. Capital budgeting decisions should reflect not just the divisional differences, but
also has to show the complicacies that arise due to the different currencies, exchange rates,
taxation policies and the different laws and regulations in different countries (Prencipe, Bar-
Yosef & Dekker, 2014). The companies’ incentive system must be able to assess, acknowledge
and reward the actions and operations of the managers who work under different economic and
financial settings across the globe. This paper will be aimed at 3xamining the role of the
accounting strategies in the environment of globalization and try to identify the challenges that
are faced by the accounting firms.
Project objective
The prime objectives of this paper are:
 To understand the impact of global trends in the globalization setting
 To observe the changing accounting practices in today’s integrated world, and

4CHALLENGES IN ACCOUNTING IN GLOBAL FINANCE
 To indentify the key challenges of accounting in today’s global economy
Project scope
The paper would try and identify the challenges of accounting in global finance and then
go on to give probable solutions that would help firms to execute auditing and accounting for the
global companies in a smoother way. The paper, once completed would have a scope of
delivering new strategies to the global companies that would make global finance accounting
easier and devoid of complicated hassle.
Literature review
The rise of the ideas and theories on globalization has brought with it many other
dimensions and new parameters were introduced which had a significant impact on the
accounting practices as well as the accountants in the globally functioning organizations (Rathee
& Kapil, 2015). Compared to the traditional accounting, modern auditing and financial
accounting firms have taken on new identities and new roadways have opened up. While the
traditional form of accounting was concerned with simple auditing and financial management,
modern financial accounting has sprouted new branches and a lot more aspects have been
included in the whole process, some of which are corporate governance, anti-corruption laws,
regulation standards, accountability in large multinational corporations (MNCs) and many more
(Bebbington, Unerman & O'Dwyer, 2014). The factor that makes all of these even more
complicated is the fact that, all these parameters have to be adhered to under different laws and
regulations in every country, hence no uniform code of conduct or action plan cannot be devised
easily. Accounting is a neutral take on the financial and economic conditions of a given
organization or industry. The economic powers and factors that are at play in the setting of
different countries all are incorporated in these financial reflections (Johnson, 2014). The

5CHALLENGES IN ACCOUNTING IN GLOBAL FINANCE
accounting practices and the outcomes give an organization the necessary insight to make vital
economic and budgeting decisions.
The figures that are presented by the accounting departments of the organizations, shape
the decision making process of the companies. Internal audits help companies to understand and
identify the areas or countries which would offer them cheap but skilled labors. Knowledge like
this is important to make decisions which would enable companies to curb costs and increase
their profit margin (Gereffi & Fernandez-Stark, 2016).
If the companies wish to stay ahead of the competition in the fierce market conditions of
today’s world, they must make the right decisions that would enable them to optimize their
operations which would keep them on top of the industry. To make these decisions, it is vital for
the organizations to keep innovating and be creative about the operations in order to be
sustainable (Ebrahim, Battilana & Mair, 2014). While making the decisions it must be kept in
mind that the organization has all the necessary information that are generated by the accounting
department.
Even excluding the aspect of globalization, there a number of other factors that affect the
role of accounting in organizations. The advent of modern technology and its applications have
affected every aspect of business operations, including management and financial auditing. In the
era of free information and technology, the ideas about how products and services are delivered
to the consumers have changed drastically, forever altering the business operations of every
organization.
Evolving market competition has prompted organizations to adopt new methods of
management accounting which comprises of innovative ways like Just In Time (JIT), Total

6CHALLENGES IN ACCOUNTING IN GLOBAL FINANCE
Quality Management (TQM) and other similar methods. Previously, organizations were only
faced with competition from local or at most, the national markets, but today every company has
to overcome the obstacles that are created by overseas companies as well (Stauffer, 2015).
There are several trends that are practiced in managerial accounting processes in the
context of glob al organizations.
Green accounting: With the threats of global warming and environmental pollution becoming
apparent every day, it is increasingly becoming a popular concept of a business organization that
will take care and maintain a balance between the environment and the operations. It has become
of paramount necessity to keep its operations clean and environment friendly if an organization
aims to keep a good relation with every customer and even the governmental bodies of the
country it is operating in (O'Connor, Sexton & Smart, 2013). this new aspect and requirement of
the customers have put accounting and analytics departments in an even more challenging
position as they are tasked with coming up with a budget and economic plan that would enable
the companies to attain Green GNP (Bodie, 2013). Investing in projects and other areas which
facilitate protection of the environment has become one of the key features of every global
organization.
Harmonization: In a time where many companies run several businesses in many countries, it is
very important to have a uniform accounting measure and process for every organization which
would help every company to keep track of their own financial operations more easily. It prime
objective of international harmonization is to make the different financial information from
different countries comparable so that companies can efficiently assess their own performances
in every country and identify where they need to work on.

7CHALLENGES IN ACCOUNTING IN GLOBAL FINANCE
Literature gap
Although the previous work has been successful in identifying the different challenges
that create an obstacle while accounting for finance in a global context, the work is mainly
focused upon the statistical interpretation of the data. The ethical and moral grounds of the issues
have been barely talked about in depth, even though these issues are just as important to
understand how the behavioral pattern of the accountants are affected. This research would be
more concerned with the ethical aspects of operating a business in the global context and
financial accounting under the setting of a globalized era which makes the accountants face
situations of moral dilemma. This particular gap will be aimed to be solved in the following
paper.
Hypothesis
Null Hypothesis: The challenges faced by accounting in global finance are going to help
the business organizations if properly met with
Alternative hypothesis: The challenges faced by accounting in global finance are not
helpful for organizations even if they are met with the right solutions
Research design
A number of tools and methods can be used to make sure that the research reaches its
desired goal of identifying the challenges of global finance accounting. Two different types of
research methods are given most importance in a broader sense:
Qualitative research: This is a set of methods that are non-numerical in nature and are used for
social science researches. These methods target specific populations and help to interpret the
collected data that gives a comprehensive idea about the social life. Qualitative research methods

8CHALLENGES IN ACCOUNTING IN GLOBAL FINANCE
help researchers to derive behavioral pattern from the results of the surveys, which help to
predict actions and behavior of the individuals and organizations in the future. This type of
research helps the researchers identify the parameters and the attributes that shape the general
behavior of the subjects and the population behavioral pattern is derived based on that
approximation (Liamputtong, 2013). The qualitative methods that are to be used in the current
research have been selected to be:
Direct observation: This is the simplest method of qualitative research which involves the
researcher to observe the activity of the subjects without interfering in the process. The research
at hand would be employing the researcher to first understand how the accountants of the global
companies operate and what are the methods and tools that are used as well as the limitations of
those methods.
Questionnaire: The accountants will be given a set of questions that will talk about different
issues that they face while working: the issues regarding international laws and regulations and
the drawbacks of the current methods of global finance accounting.
Interviews: The research will then be followed by in depth interviews which would help the
researcher to understand the issues each individual faces while working as a management
accountant in global organizations.
It must be remembered that qualitative data can be tampered with very easily and may
yield biased results. Moreover, since this type of research method is the primary focus of this
paper, these will be used extensively and a behavioral pattern will be tried to retrieve by trying to
understand how the accountants react to certain situations (Clemence, Doise & Lorenzi-Cioldi,
2014).

9CHALLENGES IN ACCOUNTING IN GLOBAL FINANCE
Quantitative research: This type of research method deals with statistical interpretations of the
gathered data through using mathematical tools which categorize answers and coming up with
definitive patterns which back up the qualitative results. This research method deals with
numerical data and the results are solidified by computational techniques. Specific conditions
and phenomenon are given logical explanation through scientific research.
The current research would take and apply a number of quantitative research methods to observe
and identify a pattern that the accountants feel are the biggest challenges in global financial
accounting process. In many cases, secondary data are the only source of collected data which
form the basis for quantitative research analysis. Surveys are also used to gather data which
would provide with the necessary parameters to calculate and analyze. The accountants and the
organizations will be asked to provide data regarding the biggest and the most frequent issues
that they have faced while making internal audits or managerial accounting, in order to
understand and decipher a pattern for the problems and the most difficult part of the process (Elo
et al., 2014). The statistical results will be immensely helpful in terms of establishing the
assumptions in a firmer way.
Research limitations
The biggest limitation of the research is, which is a problem for almost every survey ever,
is that the sample population size is too small (Brinkmann, 2014). While it may be easier to
calculate the smaller size of data, the opinions and perspectives of every individual cannot be
known from just a few. Small sample size can often lead to results being riddled with
misinterpretations and laden with false conclusions (Geppert, Matten & Williams, 2016). On the
other hand, it is virtually and physically impossible for any research to survey entire populations

10CHALLENGES IN ACCOUNTING IN GLOBAL FINANCE
and collect data from everyone on the planet. The problem of random sampling will always
remain and the current research is not devoid of the same problems.
Time schedule
week 1 week 2 week 3 week 4 week 5 week 5 week 6 week 7 week 8 week 9 week 10
Milestones
Introducti on
Des i gni ng resea rch
objecti ves and defi ni ng
the scope
Des i gni ng the structure
Des i gni ng the res ea rch
questi ons
Literature review
Res ea rchi ng the journa l s
summari s i ng the arti cl es
Methodology
Des i gni ng res ea rch
approach
Identi fyi ng sa mpl e tool s
and techni ques
Conducti ng pri mary
res earch surveys and
i ntervi ews
Al i gni ng the s econdary
col l ected da ta
Findings and analysis
Usi ng di fferent tool s to
ana l yse the data set
Interpreti ng data
Ana nl ysi ng the data
Conclusion
Summary of res ea rch
Bui l d recommendata i on
Figure: Time schedule chart
Source: created by author

11CHALLENGES IN ACCOUNTING IN GLOBAL FINANCE
Conclusion
From the above discussion it can be concluded that the problems faced by the global
companies in the context of financial accounting are very much an issue and the current research
would come in handy to identifying the most important and biggest problems. The research has
selected the methods in such a way that will facilitate in this regard and would most definitely
help to come up with probable solutions that would be of use to reduce the challenges. In the era
of globalization, companies have to adhere to a lot of aspects and in order to maintain a good
position in the industry and a good reputation, every single of these aspects have to be met.