Accounting Industry in the USA Essay Example | Topics and Well Written Essays - 3250 words

Accounting Industry in the USA - Essay Example Before this, it is used to known as the big five. External Factors affecting the performance of the Industry A business unit does not operate in hollow. It operates in an environment. The business environmental factors can be categorized as micro and macro environmental factors. The micro or internal environmental factors are those that can be controlled, whereas the macro or external environmental factors cannot be controlled by the firm and yet those factors affect the modus operand of a firm immensely. Therefore it is important for companies belonging to any industry monitor the external environmental factors and develop or modify business strategies accordingly. The external environmental factors include Political, Economic, Social and Technological factors or in short PEST (Cowan, 2005). Political Factors The political environment in the US is quite stable. Although the country has been engaged in conflicts in Iraq and Afghanistan; the local political environment has not been ha mpered by those issues. The Us government - both present and past have welcomed business investments due to which the country has become one of the economic superpowers. However, due to increase in competition, there have been cases of unethical practices. As a result, the government has imposed strict legal measures on companies induced in unethical practices. Accounting professionals have a huge role to play to ensure ethical practices are conducted by the company. Hence from an accounting firm’s perspective, it is important that reporting and mandatory disclosures are carried out ethically to avoid legal punitive actions from the government or any other regulatory bodies (Henry, 2008). Economic Factors The global economy especially Europe and U.S. are looking to get over the economic recession. The economic downturn has forced most of the companies including the major firms to focus on cost minimization. The accounting professionals play a very important role in providing a recommendation to the management to minimize cost without comprising the overall the performance of the firm. Also due to the economic recession, various companies look to outsource the accounting activities to specialist accounting firms. This may cause the companies a few bucks, but all in all, it actually helps the companies to make the business operations a lot smoother as professionals would be looking after the core accounting issues. Social Factors The people of U.S. have always been entrepreneurial in nature and hence this provides a lot of opportunity to the accounting firms as such companies may look for specialists who can help the companies in overall accounting operations.