Why CPAs Need Space Accounting Department in their Firms
Due to the recent rise of commercial space industry, most accounting firms still operate as though it is business as usual while it is very important for accountants to take a role in leadership in space exploration.
The upcoming domineering industry in the next decade is the space travel. Most organizations are already preparing themselves towards flying their tourists into space and also operating hotels in space. In fact, some of the companies will also be manufacturing in space. More technological advancements is expected to be put by affordable nanosatellites to the high orbits. Already, there are business plans for conducting mining in Mars and on the Moon. There is one thing that all these possibilities have in common; the accounting aspect.
Immediately the human race begins travelling on a regular basis, living and working in space, there will be various accounting problems that will arise and if we do not act now, we will not have a solution by then. Under what tax jurisdiction do space activities fall? What are the accounting standards that should be used in space? Which accountant shall we send to the moon to audit the mining operations?
The direct accounting problem perhaps is the manner in which capital will be raised for the exploration feats. Fortunately, there is an ancient precedent of a suitable business model in the 1607 Jamestown colony. What most people do not remember is that Jamestown was indeed a business. Jamestown began with investors who formed a joint stock company known as Virginia Company of London. All financial backing was from the company’s stockholders. There are outstanding resemblance to setting up remote colonies on the faces and moon of similar accounting problems. As such, effective use of capital markets expects accountants to validate the financial reporting for their investors. Even though Jamestown has got its own problems, most of the initial settlers went in to cannibalism while others died. Nonetheless, Jamestown eventually became very successful and laid the basis for what then became the U.S.A.
Accountants are the main people who will successfully unlock the ensuing space age. Time is running out and stakes are on the rise. Developing internationally acceptable Accounting Standards for Space will take time. It will also take time to come up with solutions of accounting problems in Space accounting. Training the next group of auditors to become astronauts will also take time. It is therefore important for CPAs to develop an interest in Space and begin a new department in their firms.