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Cross-Border Risks and Managerial Accounting Systems

Cross-Border Risks and Managerial Accounting Systems

Cross-cultural dynamics and cross-border risks are two broad, intertwined categories of factors that

influence 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


Discussion Week 2 (D-W2)


By Day 5 of Week 2, post answers to both of the following questions:

Cross-Border Risks
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

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 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.

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 assist in determining if the entire manager are in line provided timely and
much accurate data when a failure occurs, or a risk is experienced in another country.

Cross-Border Risks

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.

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