FollowWhile advanced coursework designed to assist individuals in becoming an international accountant in the modern business world is relatively new, the ideas and skills associated with the profession are not. In fact, as some experienced professionals may note, the need for an accountant with such skills has a tradition thousands of years old, as long as different cultures have traded and transacted business with each other. The article below explores what skill sets and understandings are needed for those who wish to pursue this particular career path, as well as some of the scenarios that render the field essential.
In Need of Translation
Dr. Paul E. Holt of New Accountant points out that international accounting requires the same basic skill sets of plain domestic accounting, with a slight variation. He also contends that accounting students in the 21st century will all need to attend to their studies with that variation in mind, because so many businesses are international to one degree or another.
What might that entail? Financial accountants are called to prepare and analyze statements of transactions, among other things. However, while this might be a straightforward concept in domestic accounting, international clients or subsidiary companies tend to add another dimension of complexity to the proposition. Foreign currency exchange rates shift on a regular basis, fluctuating in response to changes in both domestic and international markets.
When and Where It’s For Sale
An international accountant would perform the role of translator when quarterly analytical reports are compiled. This part of their duties has two manifestations. First, simple international transactions, in which an exchange rate applies to discrete purchases or sales of goods or services, must be calculated with the fluctuating money market in mind. The rate of exchange may vary substantially between the time of transaction and the end of the fiscal quarter when these reports are typically compiled.
In terms of purchases made in foreign currency, an international accounting specialist will be required to translate the rate of exchange difference between the time an accounts payable entry was made and actual purchase takes place. It’s a matter of specialization, since the rates can change on a daily basis in an active market. Ensuring that companies from which purchases are made are paid accurate sums is vital to maintaining a positive international business relationship.
Coordinating a Network
The second, and far more complex, role of an international accounting expert is to coordinate the reports of a vast, international business network. Companies that have holdings in other countries will transact business in the currency appropriate to their surroundings and by the laws of the host nation. The branches of these international companies will compile their quarterly reports according to these standards, which must then be translated into the currency of the parent entity, U.S. Dollars.
For individuals interested in pursuing careers in auditing, it may no longer be possible to avoid an international frame of reference. Companies with whom accountants deal may have no international holdings, but at some point, international transactions will enter the supply chain. This will impact the company being audited. An auditing professional must be aware of this, applying and understanding differing tax law structures, cultures of exchange and material production, and how the international currency exchange rate impacts sale or purchase of goods and services over time.
Related Resource: Bookkeeping Clerk
Anyone who perceives accounting as a dull or uninteresting occupation should reexamine such assessments. The international market is a constantly shifting medium, a nexus in which countless and diverse cultures intersect. And money, in one form or another, has been the medium of exchange of value for thousands of years. An international accountant is an individual allowed to observe this age-old cultural exchange at the ground level, who is responsible for ensuring all transactions are concluded properly, and who ultimately keeps our world running smoothly.
