Cross Border Risks and Managerial Accounting Order Instructions: Cross-Border Risks and Managerial Accounting Systems
Cross-cultural dynamics and cross-border risks are two broad, intertwined categories of factors that influence the multinational organizational design, planning, and control. When an enterprise decides to establish operations within a given country, cross-cultural factors are essentially exogenous; that is, they are outside management’s control over the short and intermediate term, and can only be mitigated by pulling the plug on operational efforts in that country altogether. This week’s Discussion will focus on cross-border risks, and how they influence the tactical design and evaluation of managerial accounting systems.
Discussion Week 2 (D-W2)
Participants:
By Day 5 of Week 2, post answers to both of the following questions:
Describe several methods multinational enterprises use in planning for and controlling specific types of cross-border risks.
Explain how managerial accounting systems should be adapted to provide adequate information for use in planning and control of cross-border risks.
Cross Border Risks and Managerial Accounting Sample Answer
Introduction
Cross-Border Risks is pragmatically denoted as an aspect that describes the diverse volatility of the returns that are caused by events that are associated with a specific country as opposed to the events associated solely with a specific financial or economic agent or opposed to larger macroeconomic events (Bruno, 2013).
The aspect of a Cross-Border Risks usually influences the tactical design and the assessment of the managerial accounting system by limiting market expansion because aspects such as cross-cultural factors have been considered exogenous factors that influence the multinational organizational design, planning, and even the management control (Pearson, 2011). In this particular perspective, when a business enterprise decides to establish an operation within a particular country, cross-cultural factors are essentially exogenous because they are outside management’s control over the short and intermediate term.
Multinational enterprises use diverse methods so as to plan for and control particular categories of cross-border risks such as employment of policies and procedures that bind both countries and its citizens. Most policies provided are comprehensive that take the form of the operational manual with additional memos that outline the pertinent issues (Pearson, 2011). Another method involves conducting a diverse investigation so as to gather sufficient needed data that concerns cross-border risk. The aspect of collecting numerous data from all over the market or country will assist the enterprise control particular types of cross-border risks.
Managerial accounting systems that are supposed to be adapted so as to provide sufficient data or information for use in control and planning of cross-border risks include the use of internal control (Bruno, 2013). This aspect forms an essential requirement of a well-designed management tool that assists in determining if the entire manager is in the line provided timely and many accurate data when a failure occurs, or risk is experienced in another country.
Cross Border Risks and Managerial Accounting References
Bruno, V. &. (2013). Capital flows, cross-border banking and global liquidity. National Bureau of Economic Research.
Pearson, S. (2011). Toward accountability in the cloud. IEEE Internet Computing, 64-69.
