The challenges that the accounting sector is facing in the modern era of globalization, digital technology, and artificial intelligence (AI) are addressed in this chapter. The authors achieve this by prioritizing social sustainability. One of the most important technological advancements that have drastically changed society is globalization. Additionally covered in this chapter are the significance of non-financial reporting and data quality, strategies for integrating sustainability within company operations, and management and governance ideals that promote sustainable development.
Top1. Introduction
The accounting profession is in a dynamic global business environment where it is facing challenges presented by the massive influence of globalization, sustainability, and fast technological changes. Accountants are compelled to respond to increasingly complex challenges and opportunities that arise, compelling the accounting movement to redefine its function and adjust to the ever-changing environment of society (Kroon et al., 2021). Accounting professionals are required to be knowledgeable regarding developments and the latest technological trends because of the competitive market. Additionally, such companies must be flexible and adaptive in adjusting appropriately to the changes in order to stay ahead while organizational change continues to accelerate, so is the increase in importance of flexible and adaptive leadership among most managers and administrators (Burke & Cooper, 2004; Dess & Picken, 2000). Flexible leadership theory (Yukl & Lepsinger, 2004) stresses that the top executives have the capacity to affect key success factors like efficiency, innovative adaptation, and human capital through the implementation of pertinent behaviors and decisions regarding strategy, structure, and management programs and systems. When implanting innovations, it is essential for accountants to be committed to ethics and professional values. Accountants must also be able to recognize and adjust to changing environments and customer needs. They must also be able to communicate the goals and objectives of the organization to all stakeholders. Finally, they must be able to provide guidance and support to their employees. This can bring many challenges and difficulties to modern accountants. This chapter is aimed at defining the challenges that accounting faces as an industry of modernity, including digital technology and emerging technologies such-as AI, in times characterized by globalization.
According to Herath & Joshi (2023), globalization is one of the most significant technological advancements that has revolutionized society. Not only has globalization accelerated the diffusion of worldwide global power in corporations, but also the activities of international business have become exceedingly complicated with different problems pertaining to countries with large distances. Further, attempts towards harmonizing accounting is needed at the international level through the International Financial Reporting Standards (IFRS) to determine a common framework for financial reporting, despite the fact that there are divergent jurisdictions. The globalization of businesses continues to present accountants with sophisticated challenges in assessing the implications and intricacies that are inherent in the collection of information from countries governed by different regulatory and reporting practices. Arnold (2018) researched how technological advancements affected financial reporting, external auditing, and managerial accounting, determining whether those developments promise a more radical modification of the future of accounting and auditing research. Arnold (2018) claimed that with the emergence of several information sources, investors seek prompt information releases and hence make their decisions on the basis of unaudited information.
At the same time, the world faces a great societal change towards sustainability, which requires the accountant profession to broaden its sole focus to only financial metrics and include the three pillars of economic, social, and environmental as the core of its governance. The advent of the triple bottom line, covering both economic, social, and environmental components, has changed not only the profit-making concept but also the way businesses measure their success. Stakeholders’ interest in companies sustainability management and communication has grown, resulting in increased development of how sustainability reporting evolves with a wider purpose to satisfy rising scrutiny on firm's level of impact (Hespenheide 2021). Institutional issues are also common due to the growing interest in sustainability management and the importance of an environmentally friendly company with responsibility. The Global Reporting Initiative (GRI), the Sustainability Accounting Standards Board (SASB) and the European Union Directives represent some of the main regulative frameworks, which reflect the growing demand for accurate and adequate disclosures on sustainability performance.