Globalization of Financial Reporting Essay Example | Topics and Well Written Essays - 1250 words

Globalization of Financial Reporting - Essay Example Globalization of Financial Reporting As such, the structure should be â€Å"contingency based, taking into account the variables of that particular system at that specific point in time.† The most important variables to consider are the firm’s strategy, size, technology, and environment of those countries in which the country operates. In addition, other relevant variables that affect the company’s operations are: geographic dispersion, time differences, language, culture and business practices. These could actually be classified according to resources (man, materials and market), the processes, the controls and incentives and the culture of the organization as well as that of the host country. These variables interact consistently to ensure that the global company maximizes the utilization of its resources and assure its profitability. Thereby, each and every component or variable is important in defining the success of the firm’s international operations. In this regard, this essay is written with the objective of proffering the ways in which globalization has affected one of the critical areas in an organization’s operations – its financial reporting. In addition, as the process of globalization continues, the discourse would determine The effect of globalization to organizational structure, particularly financial reporting and accounting practices are tremendously being evaluated triggered by the need to standardize reporting concepts and practices for international users.