Paper Example. Nestle Company International Accounting/Industry and Organization.

Nestle Company is one of the Multinational corporations that encourage transparency and accountability in its financial systems (Navaneetha et al., 2017). The Company has collaborated with International Financial Reporting Standards to assist investors in making wise financial decisions. Transparency and accountability are what bring about efficiency and consistent and well-informed accounting practices. This also helps financial analysts to practice functional commercial language and financial markets around the globe. The main objectives of the International Financial Reporting Standards are to enhance financial stability and build trust among the companies. Multinational Corporations such as Nestle Company has profited from such a system. It has attracted investors to invest in the Company.

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In recent studies, Nestle Company was declared as the most significant food corporation in the world. The functions of the accounting system of the Multinational Corporation cannot be overemphasized. Their financial methods have assisted their employees. For instance, they help them risk management and pensions. They help the Company to do wise business and promote innovations. Their returns and cash flow usually are high due to a sound accounting system. However, various factors affect the Company's accounting system. One of the factors is the capital market (Putra, 2019). This entails the financial instruments used in marketing the Company. For example, the source of capital for Nestle Company is mainly through Stock markets and shares. Brokers are used to buying and selling their ADRs and issues the United States securities.

Another factor that influences the Nestle accounting system is the legal system of the country. This is the strict observance of the law and rules concerning financial systems. The function of accountants is to apply the rules in accounting standards and procedures. These sets of legal standards have helped multinational corporations like Nestle company to sell their products around the world. General Mill Company and Nestle Company came together because of the same accounting legal rules. This saved them a lot of money in paying accounting fees. These legal systems make it easier for companies to access capital markets and can make comparisons. International Financial Reporting System and the International Accounting Standard Board are responsible for making International financial standards.

Furthermore, the financial reporting system also can influence the accounting system. Tax reporting and business purposes are because of accounting rules by the country's regulation. Nestle Company has collected some information about its operational, financial strategy. The Company was interested in supplying financial information. The financial analyst has focused on training and internal consultancy in evaluating economic profitability. Financial statements reports assist in recording the activities of the Company's business and its personnel. However, despite these factors, various challenges face many Multinational Corporation. There should be an understanding of the governance of the Companies to achieve financial success.

One of the critical problems that Multinational corporations face is the different legal regulations for various countries. There are differences in Generally Accepted Accounting Principles for multiple nations. For example, the International Financial Report System does not have a financial standard that is a hundred percent accepted worldwide. This has affected many Multinational Corporations operating in various nations. Things that were affected include taxation, accounting, legal matters, and the Company's profitability. Changes in rules and regulations have led to the rise of new business complex realities.

Another challenge that various Multinational Corporations such as Nestle Company, industries, and organization is foreign exchange. The risk concerning forex is that there are fluctuations in the currency exchange rate. For foreign currency returns to appreciate, the domestic currency should decrease. This kind of risk is experienced by businesses dealing with both exports and imports. Nestle Company exports food products in other countries, so most of its activities are done overseas. If the currency of foreign countries depreciates, it means that the Company would have fewer US dollars. This will make the Company receive less profit.

The significant difference between a domestic company and multinational corporation is Multinational corporations in more than two countries. Multinational corporations can easily access the global market to get capital efficiently. They also have higher chances of getting credit facilities than domestic companies. Global Corporations also attract investors that finance them. Most of these Multinational Corporations acquire their finances through the Stock Exchange and selling of securities. For example, Nestle Company does these. However, there are risks associated with international investments. Big companies must have good plans to avoid tax liabilities. Change in exchange rates is a threat too to Multinational corporations hence.

Conclusion

In conclusion, the paper has talked about Multinational Corporation standards that are mainly transparency and accountability. An example of the Company discussed was Nestle Company. The article has also talked about the financial record system and various challenges that face the accounting system. It has also examined factors that influence accounting systems such as the capital market, legal system, and financial report system. Another problem that has been considered is Foreign exchange risks. Finally, the paper has discussed the reasons why Multinational corporations are more preferred than domestic companies have. We have also talked about the risks involved in Multinational Corporations.

References

Putra, Y. M. (2019). Analysis of Factors Affecting the Interests of SMEs Using Accounting Applications. Journal of Economics and Business, 2(3).

Navaneetha, B. N., Punitha, K. P., Joseph, R. M., Rashmi, S. R., & Aishwariyaa, T. S. (2017). An analysis of the cost volume profit of Nestlé Limited. Management and Administrative Sciences Review, 6(2), 99-103.