The globalization of the accounting profession is no secret. Recent studies indicate that the global accounting market is set to reach a staggering $735.94 billion by 2025. What's even more intriguing is the shift in talent acquisition. Many firms, particularly from North America and Europe, are turning their sights toward South America when it comes to hiring. Why? It's largely due to a unique mix of accountant skills that are in high demand and the competitive advantage these regions bring.
But accounting is a global profession that requires a high level of expertise, accuracy, and ethics, and not all countries have the same accounting standards, practices, and regulations.
Let’s take a look.
The Case with Accounting Standards For International Hire
According to the International Federation of Accountants (IFAC), there are more than 3 million professional accountants worldwide, working in diverse sectors such as public practice, industry, commerce, education, government, and not-for-profit.
The International Standards on Auditing (set by IFAC), are followed by more than 130 countries. However, some countries have their own national standards or adaptations of the ISA, such as the United States, which uses the Generally Accepted Auditing Standards (GAAS) issued by the American Institute of Certified Public Accountants (AICPA).
In addition to the auditing standards, there are also different financial reporting standards that accountants need to comply with, depending on the country or region they operate in. Of course, the most widely used ones are the International Financial Reporting Standards (IFRS), which are adopted by more than 140 countries, and the US Generally Accepted Accounting Principles (US GAAP), which are used by companies listed on US stock exchanges. Other countries or regions may have their own local GAAP or variations of the IFRS or US GAAP, such as China, Japan, India, and the European Union.
What About South American Accountants?
The emergence of South America as an accounting hub is not merely coincidental. Factors such as the rich educational infrastructure, a favorable economic landscape, and linguistic advantages play pivotal roles. Let’s not forget the accounting skills that are uniquely tailored to serve global markets from this region.
For example, In Argentina, the rules for accounting are set by a group called the Argentine Federation of Professional Council in Economic Sciences (FACPCE). They make what's called "Normas Contables Profesionales" (NCP), which are based on IFRS.
But here's where it gets interesting: In Argentina, some businesses might choose to follow different accounting rules. For instance, some might go with the US GAAP, or they might use the accounting rules of the country they're connected to. Why the mix? Well, it can depend on things like what type of business they are, how big they are, or where they're listed.
Take banks and financial companies, for instance. They're shifting towards using IFRS because the Central Bank decided that they should fully use IFRS by 2018. And it's not just banks – public companies have to share their financial info with the National Securities Commission and the Buenos Aires Stock Exchange. Private companies, on the other hand, give their financial details to the Corporate Inspection Department of wherever they're based.
Now, remember this: even the public sector in Argentina does its accounting a bit differently. They follow something called Argentine GAAP, which works on an accrual basis. It's a bit like having separate rules for different parts of the accounting world. While this might seem confusing, it means that South American professionals are used to coming on going from different international standards throughout their careers.
Accountant Skills: What's Hot in South America?
Bilingual Proficiency: One of the foremost accountant skills in this region is bilingualism. Most South American accountants are proficient in Spanish, Portuguese, and often English. This linguistic edge is especially valuable to firms that have a diverse clientele.
Knowledge of International Tax Codes: Given the intertwining of global economies, accountants who are well-versed in both local and international tax codes are invaluable. South American accountants, due to their education and the nature of trade in the region, often possess this skill.
Advanced IT Proficiency: Digital transformation has revamped the accounting landscape. Accountants from South America, especially from tech hubs like Medellin or Sao Paulo, have an edge in IT-related accounting skills, including familiarity with global accounting software and cyber-security protocols.
Cultural Adaptability: The cross-cultural exposure that South American accountants receive, by virtue of their location, is remarkable. It equips them with a unique cultural adaptability, enabling them to understand and cater to a diverse range of clients.
Ethical Integrity and Transparency: South American universities emphasize ethics in their accounting curriculum. This focus translates into a workforce that holds integrity and transparency in high regard.
Accountant Skills: A Comparative Glimpse
While South America offers a robust set of accounting skills, it's essential to understand how these skills compare to other regions. This comparative analysis can serve as a guide for firms looking to hire.
Asia: Asian countries, particularly India and the Philippines, are renowned for their cost-effective accounting services. Their workforce excels in data analysis and mathematical skills. However, they might not always have the same level of bilingual proficiency as their South American counterparts and usually bring the challenge of time zone difference.
Africa: Regions like Nigeria and South Africa are rapidly growing their accounting sectors. Given the local business landscape, the accountant skills here are heavily tilted towards audit and assurance.
Eastern Europe: Countries like Poland or Romania have a reputation for stringent accounting standards and regulations. Accountants here tend to be highly methodical and detail-oriented, with a significant emphasis on compliance. The downside is that while highly skilled, these professionals tend to be less cost-effective than other options like Asia and South America.
Unique Offerings by South American Countries
While South America as a whole offers a plethora of accounting skills, it's beneficial for firms to understand the nuances of what individual countries bring to the table.
Brazil
As the largest economy in South America, Brazil boasts a well-developed financial sector. Brazilian accountants are known for their expertise in complex financial instruments and international finance. The country's integration into BRICS also means they have insights into emerging markets that few can rival.
Argentina
Argentine accountants have a reputation for their deep understanding of inflation accounting, given the country's historical economic fluctuations. This knowledge is especially valuable for firms operating in volatile markets.
Colombia
Colombia, with its rapidly expanding economy, offers accountants skilled in growth-focused financial strategies. Their expertise in mergers, acquisitions, and investment accounting is noteworthy.
Training and Development: South America's Edge
Another distinct advantage of South American accountants is their continuous pursuit of professional development. Many institutions and organizations in South America offer advanced training programs tailored to global accounting standards and practices. This commitment ensures that the accounting skills they offer are not only relevant but also updated with the latest global trends.
Challenges and Solutions
While the advantages are numerous, hiring from South America isn't without challenges. Here are some potential hurdles and ways to overcome them:
Regulatory Differences: Different countries have unique accounting regulations. While many South American accountants are trained in international standards, it's always wise to provide additional training to align them with your firm's specific needs.
Communication Barriers: Even though many South American accountants possess linguistic skills, nuances in business language can still pose challenges. Investing in communication training can be beneficial.
Integration with Existing Teams: Cultural differences, though minor, might still exist. Regular team-building exercises and introductory sessions can help in smooth integration.
The Future of Global Accounting
In an era where businesses are increasingly looking beyond borders, understanding the accounting skills offered by different regions becomes paramount. South America, with its unique blend of skills, education, and cultural adaptability, is emerging as a powerhouse in the global accounting scene.
The accountant skills they bring, especially in bilingual communication, IT proficiency, and cultural adaptability, are hard to match. By recognizing these skills and effectively leveraging them, firms can ensure not only cost efficiencies but also a high quality of work.
So, for firms aiming to lead in the future of global accounting, turning their hiring gaze towards South America might be one of the wisest decisions they make. Whether it's the rigorous training, the emphasis on ethics, or the vast reservoir of specialized knowledge, South America's accounting talent is poised to make its mark on the global stage.
By staying informed and approaching the hiring process with a well-researched strategy, accounting and finance firms can harness the best of what South America has to offer. After all, in the ever-evolving world of finance, it's the skills, expertise, and adaptability that will determine success. And in these domains, South American accountants are clearly in demand.
