international buisinessExplain how accounting systems impact upon control systems within the multinational enterprise
All the earlier answers make perfect sense. It is partly the differences in accounting practices between nations that can make one nation more "attractive" as a place to invest than another. As businesses have become more global, they have also been able to make nations compete with one another as places in which to invest. Switzerland, for instance, has long been an attractive place in which to do banking because banking rules there are much less restrictive than in other countries.
Accounting practices will have to be flexible in a multinational company, because book keeping practices will change from country to country. Moreover, think of taxes and the rules behind taxes. They, too, will change from country to country. When we add the other nuances of fiance, accounting must be flexible and be able to adapt. Also if the accounting department is wise, they will seek to capitalize on any financial benefits.
For any MNC, big decisions are going to have to be made regarding location of production and of markets. Accounting practices of different countries is going to play a big part of this decision, as every country will have its own way of working out accounts and systems for doing things. This is something that any successful MNC has to be aware of and has to use to its advantage.
Another significant area is tariffs, import and export. Since each country has different rules about what, how much, and so forth, you need a good knowledge of both basic accounting and local customs laws to get the best rates. A good accounting system will take all these factors into account before giving the estimate, and this will make overall budgeting far easier.
Accounting systems must be adapted for different exchange rates, different regulations regarding the types of records that have to be kept, and of course, for different tax policies. These can vary from country to country.