'I've seen companies with 10 or fewer legal entities that have major problems,' Cheney said. Intercompany accounting issues aren't limited to large multinationals. Global value chains-multinational companies' cross- border trade of inputs and outputs taking place within the companies' networks of affiliates, contractual partners, and arm's- length suppliers-account for about 80% of global trade, according to the United Nations Conference on Trade and Development's World Investment Report 2013.

'Multinationals need to treat their internal business with as much rigor and control as they treat their external business,' said Kyle Cheney, CPA, a partner in Deloitte's advisory practice who focuses on governance of accounting processes and activities.īest practices can cut through the complexity created by hundreds of thousands of transactions booked across multiple enterprise resource planning (ERP) systems in legal entities worldwide. Improper or insufficient intercompany accounting practices are partly to blame. Increasingly complex multinational value chains, partly the result of industry consolidation or globalization, and more scrutiny from auditors and regulators are causing more and more companies to run into serious and costly intercompany accounting problems.

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