Management accounting problems in China

Article Abstract:

The US-Sino firm Babcock & Wilcox Beijing Co (BWBC) serves as an illustration of the difficulties experienced by joint ventures in the context of managerial accounting. The boiler manufacturing company's responsibility accounting system has resulted from a blend of Western and Chinese management methods. Accrual accounting is used for purposes of financial reporting. Costing, production, pricing and profit are determined by bargaining, using Chinese government regulations and guidelines as the basis. The joint venture itself is monitored by and subject to the approval of China's Ministry of Foreign Economic Relations and Trade. All Chinese joint ventures are subject to Joint Venture Income Tax Law and entitles companies such as BWBC to tax benefits based on five situations.

China, Case studies, Joint ventures, Managerial accounting, Babcock and Wilcox Beijing Co.

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Change the environment or change the system

Article Abstract:

Foreign subsidiaries of U.S. multinational corporations (MNCs) are influenced by local social, economic, educational, and political factors. This makes evaluating the performance of a foreign subsidiary's manager particularly difficult. Since the manager cannot, as a rule, change the foreign country's environment, the manager should be evaluated only on the performance that he can control, such as material and labor costs, overhead, and revenues. A survey of internal performance evaluation systems indicated that the systems used by MNCs do not take environmental factors into consideration. Thus, MNCs should adopt new performance evaluation systems that take into account environmental factors that cannot be controlled.

Management, Foreign operations, International aspects, Subsidiary corporations, Subsidiaries, Corporations, Foreign sales corporations

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Does internal auditing improve managerial performance?

Article Abstract:

Managerial controls and performance are improved by internal auditing, according to a study involving 57 companies by the University of Michigan's Paton Accounting Center database facility. An average of 48% of internal auditors' time is now spent on monitoring management activities. No one internal auditing philosophy or approach improves managerial performance, however. Both General Electric and Alcoa had increased audit intensity and improved managerial performance, but their respective auditing systems were different.

General Electric Co., Alcoa Inc., Internal auditing

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