Types of Internal and External Accounting Reports in a Multinational Corporation

Answer

Types of Internal and External Accounting Reports in a Multinational Corporation

           Internal accounting report is documentation that contains financial and operational operation, which is usually circulated within an organization purposefully to improve performance. Subsequently, the statistics in such documents are only used by insiders since they are confidential. On the other hand, external accounting report is a file that comprises financial statements of a firm that is typically shared to the outside operative parties. Consequently, it is typically used by pooled investors, creditor and lenders, for business evaluation. There are different types of internal and external accounting reporting used for decision making in a multinational corporation. This essay, therefore, discusses types of internal and external accounting reports. Additionally, it elucidates how the reports differ for a multinational corporation.

Types of Internal Accounting Reports

           One type of internal accounting report is cash reports. Cash reports are weekly statements that are used to monitor the operations of an organization before the monthly cash flow statements (Putra, 2011). The second type is payroll report. A payroll report contains comprehensively detailed accounts of remuneration and stipend costs for each employee of an organization, purposeful to compare and balance to the original budget. Furthermore, there are sales and expenses reports which reveal gaps that lead to variances in terms of sales and expenses (Putra, 2011). Besides, margin reports are crucial internal accounting reports since they reveal a gross margin of various company products and services provided using their cost standards (Putra, 2011). Notably, a capacity report is also a vital type of internal accounting report since it is used to utilization percentage of significant manufacturing processes.

Types of External Accounting Reports

           Types of external accounting reports include income reports, the balance sheet, and cash flow statement just to mention. Income reports are accounts that contain earning statements of all the employee are the end of the financial duration of a company. Additionally, income reports contain operational statements and statements of comprehensive incomes of a firm, which assists in determining the progress of the business by the stakeholders (AccountingCoach.com, 2020). Furthermore, a balance sheet is a critical and imperative type of external accounting reports. It serves as a statement of the financial position of a corporation. Also, cash flow statements are which are types of external accounting report are vital for the lenders, creditors, and stakeholders.

Difference between Internal and External Accounting Report in Multinational Corporation

           A multinational corporation is company with various offices and assets in a different country. However, such corporations have a central office that oversees the entire operation. Each company in an individual country operates its internal affairs based on the financial policy of the respective state. Subsequently, these internal reports become different, which is unlike any other organization. On the other hand, their external accounting reports also differ based on the individual country’s financial policies.

           In conclusion, there are different types of internal and external accounting reporting used for decision making in a multinational corporation. Additionally, types of internal accounting reports include cash reports, payroll reports, sales and expense report, margin report, and capacity report. On the other hand, external accounting reports include income reports, the balance sheet and cash flow statements. Moreover, the internal and external accounting reports differ in a multinational corporation based on the financial policies of the individual country.