Cause and effect of Globalization

What is globalization? Globalization has been a phenomenon of internationalization of knowledge and a lot of activities, this phenomenon includes aspects like, economic, technological, cultural, which are influenced by the increase of communication and interdependence between countries, which have been eliminated barriers, allowing companies and individuals to communicate in real time and access to information sources and events worldwide. Technology is a basic pillar in the globalization process and plays an important role in many areas, like accounting, so an interesting question related to this area could be: How globalization can be linked directly with companies and accounting standards?

Information technology has tools that allow the transmission of information and knowledge. Companies that are looking for international markets should make an intelligent use of information technology to achieve the desired success. Right now it is happen since companies can obtain information related to business in real time, for example they can know more about competitors, customers, suppliers, governments, laws, financial reporting standards and many others things, as well as be able to provide information worldwide understood (using IFRS = International Financial Reporting Standards), so it mean that every stakeholders of the company will be able to understand the results (Profit and Loss statement, Balance Sheet, Cash Flow) of the company at the end of the quarter or fiscal year end.

An example of a tool used nowadays is Drupal, it is an enterprise application based on the CMS (Content Management System), which basically allow us to create a websites. These can be created by people who have little technical knowledge (IT knowledge), so it provides entrepreneurs a simple way to be part of a globalized world, because a web site allows companies to be in contact with rest of the world. Web sites built with Drupal have collaborative tools such as forums, chats, surveys, blogs, and many others features.

In conclusion, both business and accounting standards have been impacted by the phenomenon of globalization, so these should make use of information technology and tools such as Drupal. Also, globalization is changing accounting rules in order to be adapted to the globalized world, as IFRS which were create in order to have a common and global language. Therefore, there is no doubt that globalization has been a challenge that accounting professional and other areas have been faced.

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