Dynamics of Knowledge Renewal for Professional Accountancy Under Globalization

Introduction

Prior studies have attempted to address concerns over education of professional accountants given the corporate failures and loss of stakeholders’ confidence in the accountability of the emerging global financial system (Howieson, 2003; Hunt, 2004; Danos & Measelle, 2007). These issues include the imminent harmonization of the international financial reporting standards (IFRS), corporate governance and internal control, risk management, sustainability and ethical qualities of accounting professionals. The more recent global financial crisis emerging in 2008 has only served to raise further concerns about efficacy of the accounting profession and accounting education by the stakeholders (Sikka, 2009; Bloom & Webinger, 2011; Boyce et al., 2012). The study about the challenges of the professional need to take into account the emergence of a global financial architecture for its influence over the auditors (Loft & Humphrey, 2006; Humphrey et al., 2009). Globalization of capital markets has not only led to more similar standards but also to more potential systemic risks, which could lead to corporate failures (Kothari & Lester, 2011; Allen & Faff, 2012). Professional accountants face the challenge of a changing landscape accompanied by an increasingly complex environment in light of these convoluting challenges in the financial capital market.

Against such a background, this chapter attempts to take a step back with a macro view of the aforementioned challenging issues and to provide a literature review of pertinent studies about the reviving profession of accountancy. Embracing the dynamism in human capital development and knowledge management concepts, this article introduces a common framework to exemplify the knowledge renewal cycle that collaborates between continuing professional development activities of professional accountants and timely curriculum updates in tertiary accounting education through adapting a classical model of quality management. The dynamic approach proposed by our framework intends to raise the awareness of the global professional accounting bodies in enabling their existing and new members to improve their effectiveness in combating growing systemic challenges. Tertiary accounting programs with an objective to prepare their students for such challenges ahead need to consider crucial areas of enhancement. This prospective framework serves as a springboard to help guide and develop accounting professionals who wish to effectively discharge their responsibilities in an ever-changing landscape.