Certified Public Accountants and the 2008 Financial Crisis

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Certified Public Accountants and the 2008 Financial Crisis

There was a global financial crisis in 2007-2008 that affected most countries and changed international monetary relations. The reasons are several global factors that, under certain circumstances, led to a large-scale halting. Among the reasons is the US mortgage crisis, which was characterized by a sharp increase in mortgage defaults (Wigmore, 2021). It led to a local economic crisis that evolved into a global financial crisis around the world.

In addition, among the causes of the crisis is the general cyclical nature of economic development, which is characterized by the inevitable rise and fall. Imbalances in trade and capital movements have led to an oversupply and, in some cases, an insufficiency of financial resources. Finally, the overheating of the credit market formulated the beginning of the processes that triggered the initial mortgage crisis. It was the result of a credit expansion launched in the 1980s that had unintended consequences.

Certified Public Accountant (CPA) is a certificate awarded to a person who has deep knowledge and skills in the field of financial accounting. This qualification is one of the most prestigious in the field of finance and economics. Thus, people with such knowledge seem to have prevented a financial crisis. However, taking into account the mechanisms of the situation, namely the problems with the credit sector, it formulates an inevitable process.

At that moment, when banks began to go bankrupt and the securities markets were observed to collapse, CPAs could not terminate this process. To save the banks, large funds were allocated at the initiative of national governments. Moreover, the world was moving from a unipolar dollar currency system to a more diversified one. Thus, despite the fact that some CPAs could have foreseen the crisis, they could not prevent it because of the irreversibility of the processes triggered by the crisis.

Reference

Wigmore, B. A. (2021). The financial crisis of 2008: A history of US financial markets 20002012. Cambridge University Press.

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