CHAPTER ONE INTRODUCTION 1.1   BACKGROUND OF THE STUDY

Recently, globalization has become a significant issue which practitioners and researchers play much attention in itself and its antecedents and consequences. It has an important influence of how firms have been doing businesses in a competitive market. For the national perspective, globalization seems to affect how national governments add values of skill premium, solve unemployment obstacles, conduct independent social policies, and utilize exogenous technical change (Ethier, 2005). It outstandingly connects with the opening nature of the world economy via the rapid diffusion of information and communication technology (Levy, 2007). To clearly address the global concerns, globalization potentially involves economic and financial integration through the abolition of capital controls and the dismantling of barriers (Oxelheim, 2009). Thus, the impacts, influences, effects, and roles of globalization have been intensively debated, discussed, and criticized in the diversified fields of businesses, economics, sociology, political sciences, information technology, communication, and others, in both micro and macro levels, and in the national and international views.

In the light of the globalization aspect, globalization is related to the growing mobility of goods, services, commodities, information, people, and communication across frontiers (Arnold and Sikka, 2001). It refers to a process through events and decisions in one part of the world can have significant consequences for individuals and societies in distant parts of the world. Increasingly, globalization definitely focuses on a political, economic, technological, and cultural process that is especially characterized by the growth and spread of suprastatism, supranationalism, and supraterritoriality (Gallhofer and Haslam, 2006). Under the globalization conditions, firms have easily moved and transferred all business activities to other parties in national, international, and globalize societies, and smoothly accepted and received them from others. To outstandingly understand a view of the globalization, globalization herein, consists of three dimensions, namely, barrier reduction, quick response to changes, and multilateral trade liberalization (Ethier, 2005). Accordingly, it has played important roles in explaining economic, technology, culture circumstances, and others. However, it tends to have a significant effect on business activities, especially accounting practices and functions.

Interestingly, accounting has been forced and affected by the possibilities and processes of globalization. They potentially impact the harmonization of accounting and audit standards, financial reporting, and financial services, and the financial coordination and control of dispersed subsidiaries of multinational firms (Cooper et al., 1998). For example, accounting practices of transnational corporations, transfer pricing, and international taxation are evidences to the debate on globalization (Arnold and Sikka, 2001). To indicate accounting in relation to globalization, firms have gained the globalization pressures in order to report their environmental activities and responsibilities. They are willing to voluntarily disclose accounting transactions through foreign capital, product, and labor markets, and environments and social responsibilities even though a country has a weak legal environment (Webb et al., 2008).

1.2 STATEMENT OF THE PROBLEM

Accounting professionalism refers to a preference by accountants to exercise individual professional judgment in undertaking accounting tasks and entail the maintenance of professional self-regulation (Askary, 2006), and best accounting practices are defined as ways, methods, procedures, and guidelines which firms have implemented them in order to operate their accounting activities concerning with governance, accountability, social responsibility, and business ethics. Then, the effects of globalization on accounting professionalism and best accounting practices are explicitly investigated in this study. Moderating effects of the aforementioned relationships are also examined.

With the interest of the relationships among globalization, accounting professionalism, and best accounting practices, the objective of this study is to examine the effects of globalization on accounting professionalism and best accounting practices through individual learning and continuous self improvement of accounting executives of Thai listed-firms.

1.3 OBJECTIVE OF THE STUDY

1. To determine if globalization has a positive relationship with accounting professional and best accounting practices.
2. To how accounting professional has a positive influence on best accounting practices.
3. To Know the continuous self improvement positively moderate the accounting professionalism-best accounting practices relationships.

1.4 RESEARCH QUESTION

Globalization includes barrier reduction, quick response to changes, and multilateral trade liberalization, and accounting professionalism consists of individual professional judgment and professional self-regulation. Within the current study, the key research questions are:

(1) How globalization has a positive relationship with accounting professionalism and best accounting practices?

(2) How accounting professionalism has a positive influence on best accounting practices?

(3) Are barrier reduction, quick response to changes, and multilateral trade liberalization as the dimensions of globalization? (4) Are individual professional judgment and professional self-regulation as the dimensions of accounting professionalism?

(5) Do individual learning positively moderate the globalization-accounting professionalism relationships?

(6) Do continuous self improvement positively moderate the accounting professionalism-best accounting practices relationships?

1.5 SIGNIFICANCE OF THE STUDY

Also, the globalization of the world’s economies has forced to establish a single set of financial reporting standards (Chand and White, 2007). The formulation and promulgation of International Financial Reporting Standards (IFRSs) are outcomes of regulation, public, and private interests that represent the international accounting debate by concerning with the globalization issues. Likewise, the design of governance mechanisms (board size, board composition, executive compensation, market discipline, interlocking directorate, ownership concentration, duality, and inbreeding) and the design of accountability systems (accounting information, auditing standards, and financial and non-financial disclosures) are results of the globalization forces (Luo, 2005). While globalization has potentially affected the accounting activities, functions, responsibilities, and practices, it is likely to influence behaviors and job responsibilities of the accountants and other accounting professions, such as accounting professionalism and best accounting practices.

1.6 SCOPE AND LIMITATION OF THE STUDY

The scope of this study although is very wide if it has been carried out in the entire organization. For this reason, it was necessary to have a concentrated area to study which was restricted to the impact of globalization on professional accounting firms.

Its major limitation was the problem of getting information from the institution under study. As parastatal, there is always the fear of giving information to the public as such vital information needed was not ready available.

Time equally will not be left out; leaving the school during lecture, test/Exam was also in conducive and the issue of finance cannot be ignored as much was sent it procuring materials.

However, with fact and judicial used of the limited resources, reasonable analysis have been carried out in this research work.