Multinational Accounting Challenges

This assignment delves into the multifaceted accounting challenges encountered by multinational corporations. It examines issues related to international financial reporting standards (IFRS), transfer pricing, uncertain tax positions, and the impact of evolving tax regulations on corporate practices. Students are tasked with analyzing these complexities through academic research and real-world examples, drawing upon sources like journals, case studies, and news articles.

Running Head: Business Research
Elucidating the challenges of accounting for multinational corporations: A case
study of Apple Company

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Table of Contents
Introduction......................................................................................................................................2
Project Objective.............................................................................................................................3
Project Scope...................................................................................................................................4
Literature Review............................................................................................................................5
Research Questions/Hypothesis.......................................................................................................6
Research Design and Methodology.................................................................................................7
Research Limitations.......................................................................................................................9
Time Schedule (Research Plan).....................................................................................................10
Conclusion.....................................................................................................................................11
References......................................................................................................................................12
Appendix........................................................................................................................................14

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Research title: Elucidating the challenges of accounting for multinational corporations: A case
study of Apple Company
Introduction
Multinational organizations are operating at the global level and for the effective execution of the
operations, it is vital to comply with the accounting and tax system. This will help in resolving
the issues or disputes faced by the organizations in a better manner. Different issues are being
faced by the multinational organizations which are creating an impact on the operations of the
business (Mann, 2012). These issues include ambiguous, inconsistency and ever-changing
taxation rules. An effective tax and accounting system has to be adopted by the organizations so
as to recover from the downturn, operating in the global market, coping with the foreign tax
regulations at the local and global level and coping with the issues of budget deficits (McKinley
& Owsley, 2013). This research will focus on the accounting issues which are affecting the
performance of multinational organizations by focusing on Apple Inc.

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Project Objective
Objectives are formulated with a motive to form a base for the data collection process.
Objectives help in guiding the researcher towards the right direction. The objective of this
research program is to analyze the issues related to the accounting aspect of the multinational
organization during the execution of the business operations at international level. Another
objective is to analyze the accounting policies which can be adopted by the multinational
organizations for coping with the issues.

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Project Scope
The focus of this research program will be on the various accounting standards adopted by Apple
Inc. and issues which are being faced by the company during the launch of its products in the
external market. Different accounting regulations will be covered in this research program which
is being adopted for the management of internal environment by the organization. It will focus
on the issues and policies available for solving the issues faced by the multinational
organizations.

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Literature Review
In the words of Freedman (2011), accounting is an important aspect which includes a recording
of the transactions executed by the organization and keeping the records of the transactions. It is
essential for the organizations operating at an international level to consider the tax jurisdiction
for complying with rules and regulations. There is a need to comply with the changing taxation
rules and regulations (Kravitz, 2016). It has been recommended to the organizations to enroll in
the international operations by meeting the tax laws of the land. Different principles need to be
adopted by the company so as to match up with the tax rules and regulations (Lipin, 2011).
Another issue which is being faced by the organizations at international level is revenue
recognition. Revenue is an important element for the financial statements (Gornik-Tomaszewski
& Showerman, 2010). Revenue recognition is considered as an important accounting policy
which determines when to recognize the revenue generated from the sale of the products of the
company (Norton, 2011).

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Research Questions/Hypothesis
Primary Question
 Which issues are being faced by the multinational organizations related to the accounting
aspect while performing the business operations at the global level?
Secondary Questions
 Which accounting policies can be adopted by the multinational organizations for coping
with these issues?
 What are the impacts of these issues related to accounting on the multinational
organizations and their performance?

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Research Design and Methodology
Different methods are present which can be adopted by the researcher for the purpose of
conducting the research program by collecting quality data. Analysis has been done of the
various methods available for the selection of the most suitable and appropriate methods for the
completion of the research and attaining the objectives defined. In this research program, the
focus is on a collection of the data regarding the issues related to the accounting which are being
faced by the organizations while execution of the operations of the business at the global level.
There are various accounting policies used by the multinational organizations for overcoming
these issues. Data regarding these aspects will be assembled with the use of the selected methods
of data collection.
Research design: analysis has been done of qualitative and quantitative research method so as to
select the most appropriate method for data collection. Qualitative research method has been
preferred for this research program. Qualitative research methods use semi-structured or
unstructured methods for the collection of the data regarding the aspect (Kielmann, et. al., 2012).
The reason behind the selection of this method is the data provided by the qualitative research
method regarding the issue, aspect or the trend (Acaps, 2012). The better analysis will be done of
the issues faced by the multinational organizations regarding the accounting aspect while
managing the business operations. This research method will help in assembling quality data
regarding the accounting issues faced by the Multinational organizations.
Research approach: qualitative approach has been chosen for this research program among the
various alternatives available. The motive behind the selection of this approach is a collection of
the relevant data for the research project. Primary and secondary sources are applied to the

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assembling of the required data. This approach ensures the quality of the data as well as
contributes to the reliability and authenticity of the data.
Data collection: collecting the required data is an essential aspect of every research as it
determines the quality of the research work carried out by the researcher. Primary and secondary
sources have been chosen from the list of available methods for data collection. Primary data is
the raw data which gets assembled specifically for the research program by the researcher
directly from the respondents. This information is first-hand data as it is collected directly from
the respondents (Thomas, 2015). Secondary data is the second-hand data which gets assembled
from the work of other researchers from internet or newspapers (Johnston, 2014). When the
discussion is made regarding the reliability, secondary data is considered over the primary data
(Turkenburg & McAuley, 2013).
Sampling method: after analysis of the different sampling methods, random sampling has been
chosen. Random sampling technique is an approach in which selection of the sample is done on a
random basis which eliminates the selection of the samples on the biased basis (Banerjee, 2012).
Samples get selected by providing equal opportunity of getting selected for the analysis and
evaluation process (Alvi, 2016).
Research strategy: for the completion of the research program in a successful manner, there is a
need to adopt a strategy which will ensure the completion of the research by covering every
aspect. A sequential strategy is an effective approach for ensuring the completion of research in a
pre-defined order. This will cover every activity one after one for the attainment of the
objectives.

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Targeted market: this term can be defined as the place from where data regarding the research
program is to be assembled. Research data has to be gathered by targeting the market from where
data has to be accumulated. Primary data will be accumulated with the help of a questionnaire to
the employees working in the accounts department of the multinational organizations. Secondary
data will be accumulated from the internet sources such as journals, websites, notifications, and
articles.
Timeframe: an action plan has been prepared with an objective to define the time period in
which every activity of the research has to be completed. This timeframe will serve as a blueprint
for every activity of the research.
Ethical considerations: ethics helps in guiding the individual towards the right or wrong. While
conducting the research program, focus of the researcher should be on conducting the research in
a fair manner. For this research project, few ethical aspects have been taken into consideration.
These ethical aspects are confidentiality, unbiasedness or fairness and integrity.

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Research Limitations
Research limitations can be defined as the hurdles or issues which affects the execution process
of the research program. Identification of the research limitations needs to be done in an effective
manner as these limitations create an impact on the successful completion of the research
program. Different approaches are being used by the researchers for overcoming these
limitations and elimination of the impact of these limitations on the research program. Quality of
the research may get affected due to the presence of the research limitations. Research
limitations identified during the execution process of this research project are lack of availability
of resources, insufficient time period and lack of right to access the data.

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Time Schedule (Research Plan)
Sequence Activities Date of
initiation
Duration
(ways)
Date of
completion
A) Selection of the research topic 24 January 2018 1 24 January
2018
B) Formulating plans for framing
a base for the research
25 January 2018 5 29 January
2018
C) Execution of the plans framed 30 January 2018 7 05 February
2018
D) Selection of methods for
assembling of the data
06 February
2018
1 06 February
2018
E) Using selected methods for
data collection
07 February
2018
6 12 February
2018
F) Analysis and evaluation 13 February
2018
3 15 February
2018
G) Conclusion and 16 February 1 16 February

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recommendations 2018 2018
Gantt chart

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Conclusion
From the above discussion, it can be stated that numerous challenges are being faced by Apple
Inc. while the recording of the transactions and managing accounting functions. These challenges
or issues include uncertain tax positions and revenue recognition. These issues or challenges are
creating an adverse impact on the performance of the organization. Organizations faces issues in
the identification, measurement, evaluation, and reporting of the uncertain tax positions. These
issues are faced regarding the uncertain tax position is due to the analysis of the new, existing
and changing tax positions. Revenue recognition is one of the most important accounting policies
for an organization. The point-of-sale approach has been selected by Apple for recognizing the
revenue just after the sale of the hardware products.

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References
Acaps, 2012, “Qualitative and Quantitative Research Techniques for Humanitarian Needs
Assessment”, Acaps.
Alvi, M., 2016, “A Manual for Selecting Sampling Techniques in Research”, MPRA.
Banerjee, M., 2012, “Simple Random Sampling”, University of Michigan.
Davis, B., 2018, “The Multinational Corporation and Globalization”, Slideplayer. Accessed on:
25 January 2018. Available at: http://slideplayer.com/slide/6202217/
Freedman, J., 2011, “Responsive regulation, risk, and rules: applying the theory to tax
practice”, University of British Columbia Law Review, Vol. 44(3), p.627.
Gornik-Tomaszewski, S. & Showerman, S., 2010, “IFRS in the United States: Challenges and
Opportunities”, Review of Business, Vol. 30(2), pp.59–71.
Johnston, M. P., 2014, “Secondary Data Analysis: A Method of which the Time Has Come”,
Qualitative and Quantitative Methods in Libraries (QQML), 3:619 –626.
Kielmann, K., Cataldo, F. & Seeley, J., 2012, “Introduction to Qualitative Research
Methodology: A Training Manual”, DFID. Accessed on: 25 January 2018. Available at:
https://www.rbfhealth.org/sites/rbf/files/Introduction%20to%20Qualitative%20Research
%20Methodology%20-%20A%20Training%20Manual.pdf
Kravitz, R., 2016, “Serving Two Masters: A Challenge for the Profession and Planners”, The
CPA Journal, Vol. 86(9), pp.61–62.

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Lipin, I. A., 2011, “Uncertain tax positions and the new tax policy of disclosure through the
schedule UTP”, Virginia Tax Review, Vol. 30(4), pp.663–713.
Mann, R., 2012, “Chief Counsel's subtle impact on revenue: regulations, litigation, and
administrative guidance”, National Tax Journal, Vol. 65(4), pp.889–898.
McKinley, J. & Owsley, J., 2013, “Transfer pricing and its effect on financial reporting:
multinational companies face high-risk tax accounting”, Journal of Accountancy, Vol. 216(4),
p.50.
Norton, B., 2011, “Hyper-Regulation Leaves No Place to Hide”, Financial Executive, vol. 27(1),
pp.40–44.
Taborn, H., 2018, “Welcome to Apple: Group 8”, Slideplayer. Accessed on: 25 January 2018.
Available at: http://slideplayer.com/slide/2912183/
Thomas, J. A., 2015, “Using unstructured diaries for primary data collection”, Nurse researcher,
vol. 22, no. 5, pp. 25.
Turkenburg, J. P. & McAuley, K. E., 2013, “Data collection and processing”, Acta
Crystallographica Section D, Vol. 69(7), pp. 1193-1194.

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Appendix
Figure 1: Challenges related to accounting faced by multinational organizations
Source: (Davis, 2018)

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Figure 2: Consolidated P&L statement of Apple
Source: (Taborn, 2018)