Wednesday, September 25, 2013

Immigration Reform and International Accounting Standards

An attorney friend recently gave me a rundown of the latest resistance against immigration reform. As she explained, there is a plan in place, one advocated and passed by Democrats, but not accepted by conservatives. 

The disagreement between the parties has not changed much from the past: who should stay, who should leave, who to extend rights to, and who should be granted work visas. That last topic has been heavily contested, leading to internal fighting among our dearly beloved politicians over duration of stay and what not. It's too complicated to cover it all here in one post really, but the bottom line is that immigration reform is still a point of volatile contention. This knowing that the benefits of opening our borders to international professionals increases our own talent pipelines here in the US. 

The disagreement is not surprising. We expect diversity of opinions in such important decisions, especially in a democratic country where such opinions can be openly expressed. What is surprising is how the same groups opposed to allowing these internationals entry are fine with our corporations expanding their goods and services abroad. In fact, those who oppose the current immigration policies are the same ones who support US corporations expanding abroad. 

The reasons are obvious: there are tax benefits, payroll savings, and corporations stationed abroad are not bound by US laws. This will all change as accounting policies gradually become standardized globally. Implementation of International Financial Reporting Standards (IFRS) has been slow, since getting the global community on board does have its challenges, but it will make it difficult for corporations to reap the benefits of the past. The new standards will not only affect financial reporting, but will also impact tax policies, loan agreements, compensation, and extend protections to all workers. Corporations will be bound by the same laws at home as they are in host countries, which is why most companies are probably resisting the change in the first place. 

First step is the implementation. The SEC has given the change its full support, although it has found several setbacks to overcome. So long as it can continue standing up to corporate lobbyists, the program is still chugging along. When that will happen is still unknown, but it appears that the accounting profession may have inadvertently found a solution to the immigration debate. 

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