ABSTRACT
The GlaxoSmithKline case illustrates that MNEs should deal appropriately with accounting and tax issues that affect the firms’ net incomes and cash flow. The aim of an accounting system is to identify, measure, and communicate economic information to allow informed judgments and decisions by users of the information. Today, the explosive expansion of cross-border transactions and the rapid growth of companies seeking capital in international markets have made international accounting issues a daily concern for international managers. International accounting involves accounting and taxation issues for companies that have internationalized their economic activities across countries in which accounting standards and practices vary. Four fundamental issues need to be understood by international business managers: (1) country differences in accounting and international harmonization; (2) foreign currency translation; (3) cross-border transfer pricing; and (4) tax havens, treaties, and strategies. We explain country differences in the next section.
