The community, rediscovered by its revived and romantic admirers (they see it now again threatened by dark, uprooting and depersonalizing forces entrenched this time in global society), is not the antidote to globalization, but one of its inevitable global consequences, product and condition at the same time. (Beck, Ulrick, 2001, p. 122)
"The disorientation of today's world starts from the separation between the technical, scientific and political world of the logic of the interior of man, of his values, of his imagination." (Alain, Tauraine, 1999, p. 113).
Globalization and accounting
Large-scale economic, technological, social and cultural process, which consists of the growing communication and interdependence between the different countries of the world unifying their markets, societies and cultures, through a series of social, economic and political transformations that give them a global character that affects the world in different ways but in this article we will see how it affects accounting.
What is it? The globalization
Globalization is an economic, technological, social and cultural process on a planetary scale that consists of the growing communication and interdependence between the different countries of the world unifying their markets, societies and cultures, through a series of social, economic and political transformations that give them a global character. Globalization is often identified as a dynamic process produced mainly by societies that live under democratic capitalism or liberal democracy, and that have opened their doors to the information revolution, folding into a considerable level of liberalization and democratization in their political culture., in its national legal and economic system, and in its international relations.
Your background
This process originated in Western Civilization and which has spread around the world in the last decades of the Contemporary Age (second half of the 20th century) receives its greatest impulse with the fall of communism and the end of the Cold War, and continues in The 21st century. It is characterized in the economy by the integration of local economies to a world market economy where the modes of production and capital movements are configured on a planetary scale (New Economy), gaining greater importance in the role of multinational companies and free circulation of capital together with the definitive establishment of the consumer society.
Although the above was its background, let's see the most important thing during globalization in some countries
Aldo Ferrer points out that the current globalization process is part of a larger process that began in 1492 with the conquest and colonization of a large part of the world by Europe, the arrival of man on the Moon, which coincides with the first worldwide transmission via satellite (July 20, 1969), or the creation of the Internet (September 1, 1969)
However, a new crisis that began in the mid-sixties (see stagflation), exacerbated by the 1973 oil crisis, caused a radical reorganization of the economy, based on the intense promotion of technological innovation (ICT)
In the Pinochet government in Chile (in what was called an "experiment", 5 see Milagro de Chile), followed by Thatcher's (1979-1990) in Great Britain)
On November 9, 1989, the Berlin Wall fell, paving the way for the implosion of the Soviet Union in 1991 and the demise of the communist bloc. From that moment, a new historical stage began: globalization.
In order to start with the development of the subject, a brief introduction of the current neoliberal globalizing model must be clarified, or more than clarified, since it is from there that the current globalization policies of the accounting profession are derived.
Globalization process integrates at least three major markets:
The market of transnational companies, where when listing the nations according to their gross domestic product, the country number 15 is called General Motors, in 1994 the GDP of El Salvador was 8,070 million dollars, in the same year, the Mitsubitshi's turnover was 175.8 billion dollars.
The financial market, this market mobilizes 1.2 trillion dollars daily, to take it in a much more graphic way, it is equivalent to saying that in 4 days of international bank transfers, more money is manipulated than all the production created by the United States economy in a year, or by the world economy in a month.
The means of social communication, which serve globalization, transmitting facts, events and interpretations, creating a new culture to produce, earn and consume.
The three markets are interdependent and are related or interact with each other, allowing globalization to take place, and all of this is a process of cultural homogeneity and uniformity.
This globalizing process is defined in some parameters, which are the basis of globalization, it is what gives shape to globalization, on which the entire political and economic system of the postmodern world is founded:
- The "Hypertrophy" of international finance and global credit creation is placed in a privileged place. Internationalization of capital through global corporations. The increasing power of international capital agencies, such as the IMF, WB, OMC. Rapid movements of financial capital accelerated by new information technologies. Growth of world trade.
As already said, these parameters are very important, but something else is needed, something that allows or facilitates a much more reliable and timely information management, and that is where Accounting comes in.
It is necessary that the accounting - financial information in the different countries be uniform, and this is taking place through the standardization or equality of accounting practice. (All must have the same accounting system)
To get into the central theme of the work, we start from two interrelated themes or assumptions:
That the world is going, by leaps and bounds, towards a globalization of the economy, a topic that was dealt with in the introductory part.
That it would be desirable for the information offered through the financial statements to be based on standards of reasonable uniformity.
It is said or considered that the first premise, in order to improve the quality of accounting information, in its relation to the globalization of the economy, is to try as much as possible to seek reasonable uniformity in the presentation and evaluation standards, well that everything is present as similar as possible to that of the other countries since it has to be uniform. Even though, with pragmatic criteria, it is almost impossible to maintain that, worldwide, all countries agree to adhere to a single model, with different political realities and constitutional frameworks, it makes an idea of this type almost utopian.
However, it is thought that if a well-founded model is taken at the theoretical level, it is possible to introduce variations and alleviate rigidities that make it possible, step by step, to advance in growth towards uniformity.
What are the objectives of the financial statements?
The objective of the financial statements is to provide information on the issuer's equity as of a date and its economic and financial evolution in the period covered, to facilitate economic decision-making. It is considered that the information to be provided in the financial statements should refer to the following aspects of the issuing entity:
- Your equity situation at the date of the statements A summary of the causes of the result assignable to that period; The evolution of your equity during the period; The evolution of your financial situation for the same period, Other facts that help to evaluate the amounts, moments and uncertainties of future investor cash flows.
Serve as a guide for the management and investor policy regarding profit distribution.
Serve as a basis for the application and granting of financial and commercial credits.
Serve as a guide for investors interested in buying and selling.
It seems clear, thinking about accounting for business entities, that the most convenient information for decision-making should be that which offers items and figures with economic significance. That is, information that allows the user to transform it into knowledge about the issues on which he has to decide.
The information offered must fundamentally revolve around an accepted profit concept.
Accounting models
According to Millar and Starr, models are representations of reality that attempt to describe, explain or predict how some aspect of it behaves.
It is the opinion of these authors that the accounting reports would be quantitative and qualitative models that will be classified according to the degree to which they fulfill their objective of the models that provide information.
Obviously, many accounting models can be designed, which are constructions of schemes that are not identical to reality, but that will try to approximate it by simplification based on assumptions and seeking to offer useful information that, according to what was said in the previous point, will be used not only by the entity that prepares it but also by third parties that may be related to it or interested in being so.
For this reason, the need has arisen that, in the event that the information can be directed to third parties, there are special regulations that systematize the presentation and fix the valuation of the items or accounts that make up that information.
International accounting standards at the service of financial capital…
In the current process of globalization of the economy, accounting is the most relevant profession, it is the pillar and fundamental axis for this process to be carried out.
But this process cannot be carried out if the accounting practices of the countries that intend to enter this globalization process are not standardized; This is why international accounting standards are of such importance.
It should be noted that in the process of preparing international accounting standards, only the protection of financial capital and the interests of multinationals has been taken as consideration, without giving greater importance to issues as transcendental as social, in addition to the fact that It does not take into account the characteristics of each country, socio-economic conditions that in no case can be standardized and that is where the great shortcoming of international accounting standards is found; firstly because a single set of accounting standards cannot be expected to cover a large number of countries,especially when trying to put on the same plane or trying to measure with the same standard an economic superpower such as the United States with a weak and insipient economy And secondly, there has not even been a true process of elaboration of international standards accounting where countries interested in implementing them participate equally.
As I said before, international accounting standards seek to protect financial capital, but not the economies of underdeveloped countries.
International accounting standards are part of a whole set of measures that developed countries and owners of financial capital have gradually implemented in our countries to allow, among other things, but mainly the free movement of financial capital or what is known as the “swallow” capital, so named due to its characteristic of constantly jumping from country to country. This capital has been one of the main causes, among others, of crises such as the one in Mexico, which generated the tequila effect, and the most recent one in Argentina.
All this is reflected in an article written by George Soros, called "towards a global open society" a few weeks after the outbreak of the financial crisis of 1997. George Soros has been working in this financial market for 40 years and knows its insides. George Soros says:
"There are five types of deficiencies in the global capitalist system"
The benefits of global capitalism are unevenly distributed. Capital is in a much better position than labor because it is more mobile. Furthermore, finance capital is better situated in the global system than industrial capital.
Financial markets are unstable by nature, and even more so are international financial markets. The risks of collapse are increased because our theoretical understanding of how financial markets work is basically flawed.
Who should avoid undue concentration of power and safeguard stability? This would lead us to the role of the state. But the state's ability to look after the well-being of its citizens has been severely affected by globalization, because capital can escape control much more easily than labor.
This brings us to the most confusing problem: that of values and social cohesion. Every society needs to have shared values. Market values do not serve this purpose because they only reflect what one market participant is willing to pay to another within an exchange book. Markets reduce everything, including human beings (labor) and nature (land) to merchandise. We can have a market economy, but we cannot have a market society.
conclusion
It is for all this that we consider that accounting should radically change the way it has been working, that is, at the service of financial capital and globalization, which by the way, has proven incapable of solving socioeconomic problems (unemployment, poverty).
Accounting must be approached in another way, that it serves it or that it is in the function of all and not of a few, that is, at the service of society, in search of a sustainable and harmonious economic and human development, which occurs in terms of equality and social justice, where we all benefit, but not a few.
References
- Globalization in the Dictionary Ferrer, Aldo, Facts and fictions of globalization, Fondo de Cultura Económica, Buenos Aires, 1997, p. 13. Negative factors of globalization in accounting Written by Angie Mohr - Translated by Cesar Daniel González Ménez
