| The global financial crisis of 2008 began with the rapid | | | | accountants in various ways as well. The current |
| decline in housing prices, increased interest rates, and | | | | global financial crisis has a strong correlation with |
| the increase in subprime lending which lead to a | | | | globalization. Presently, financial institutions from across |
| growing rate in mortgage foreclosures. The subprime | | | | the world are more dependent on one another than |
| mortgage crisis has affected various financial | | | | companies have been in the past. Consequently, the |
| institutions and banking systems across the world in | | | | fall of large financial institutions can strongly effect |
| various ways. With the fall of large financial institutions | | | | other financial institutions across the world because of |
| such as, Fannie Mae and Freddie Mac, Lehman | | | | the dependence on one another. An additional aspect |
| Brothers, Merrill Lynch, and American International | | | | of globalization that effect accountants is the change |
| Group (AIG) the Federal Reserve have responded in | | | | to using International Financial Reporting Standards |
| an attempt to relieve the crisis of the credit markets. | | | | (IFRS). The transition from Generally Accepted |
| The fall of financial institutions has created a domino | | | | Accounting Principles to International Financial Reporting |
| effect on the economy. Thus, there is very little that | | | | Standards has a great impact on accountants during |
| the Federal Reserve can do to avoid the collapse of | | | | this time. Accountants are preparing for the transition, |
| other financial institutions. In addition to affecting the | | | | which also causes a greater demand for accountants |
| financial institutions, the financial crisis has affected | | | | despite the global financial crisis. Accountants who are |
| accountants in various ways. Although the global | | | | knowledgeable about the subject area are in a higher |
| financial crisis has affected overall businesses in a | | | | demand, compared to accountants who are less |
| negative aspect, the effect on accountants haven’t | | | | knowledgeable. Although countries are already |
| been as negative. | | | | interlinked, adopting IFRS will only ensure a stronger |
| Due to the past accounting | | | | connection between countries because they will be |
| scandals, there has been a significant increase in | | | | using the same regulations which can have an impact |
| financial laws, stricter government regulations, and | | | | on the global financial crisis. |
| increase in risk prevalent in financial institutions has in | | | | Although, some of the effects on |
| turned increased the demand for accountants, despite | | | | accountants are positive, negative effects still exist. |
| the economy. The Public Company Accounting | | | | The global financial crisis is affecting all businesses in |
| Oversight Board established the Sarbanes-Oxley Act | | | | the United States and worldwide overall. Due to the |
| of 2002 which requires all publically traded companies | | | | crisis, businesses are cutting costs throughout their |
| in the United States to follow specific rules and | | | | organizations. For instance, clients of accountants are |
| regulations. Abiding by these regulations increases the | | | | spending less and are cutting back tremendously |
| costs of publically traded companies and in turn | | | | because of the economy. As a result, accountants are |
| increases the demand for accountants and auditors. | | | | losing clients in which they have built relationships with |
| As a result of the financial crisis, there is an increased | | | | because their clients do not have the revenues to |
| risk within the financial aspects of companies; | | | | support the services of accountants. Thus, |
| therefore, the need for risk management has | | | | accountants are losing clients, and therefore are also |
| increased within financial institutions. Companies are | | | | losing revenues. In return, accounting firms are also |
| tending to show a greater need to understand and | | | | cutting costs along their organizations to account for |
| assess risk and are reaching out to accountants to | | | | the decrease in clients. Currently, accounting firms are |
| assist with the understanding of risk management | | | | cutting costs by lowering the amount of employees to |
| during this difficult time. Risk management is very | | | | hire. Recruiting practices have been increasing within |
| essential and can be the breaking point in a | | | | the past couple of years but with the economy |
| company’s financial success, especially during a | | | | approaching a recession, the recruiting practices have |
| financial crisis. This increase in financial laws, stricter | | | | slowed. |
| regulations, and increase in financial risk, has a positive | | | | Although the global financial crisis |
| effect on the demand of accountants. | | | | of 2008 has a negative effect on businesses overall, |
| The concept of globalization has | | | | the effects on accountants aren’t as negative. It is |
| a strong correlation with the global financial crisis of | | | | evident that accountants are in high demand at this |
| 2008. Because of globalization, countries are interlinked | | | | point due to many factors in spite of the economy. |
| and dependent on one another now, more than ever | | | | Accounting is a profession that is fortunate to still be in |
| before. Globalization has also affected the demand of | | | | high demand during the global financial crisis of 2008. |