Competency

Explore special topics in accounting information systems to include the impact of globalization and a multinational business presence.

Scenario Information

BeGood Baking Supply is a small bakery supply company formed as a closely held corporation. The company supplies raw baking materials, paper goods, and equipment to restaurants and bakeries in three states in the upper mid-west. Most of its business, however, is located in a large metropolitan area. BeGood wants to increase its presence in the region and serve five states. In fact, the owners of BeGood would like 75% of their business to come from throughout the region rather than the current metropolitan area. In order to do this, the owners understand they must diversify offerings and lines of business.

Currently, BeGood has a phone center where customer orders are taken; these orders are then sent to shipping where the order is filled in its large warehouse and shipped within four days. BeGood outsources its shipping to a local trucking company. Once the order ships, all paperwork goes to the accounting department where it is entered into the accounting system. BeGood still uses the same accounting system it has used since the inception of the company. All aging of receivables and other analysis is done using Excel spreadsheets. Purchasing and tracking of inventory are done solely by the warehouse manager. Invoices for inventory purchasing are sent to the accounting department when goods are received.

The owners at BeGood are wondering how they can utilize an online presence and further automate its systems in order to facilitate its growth and diversify its business. The owners may also like to expand into the retail business.

You have been hired as a full-time staff accountant at BeGood Baking Supply and have been given the task of evaluating and recommending a viable accounting information system for the accounting and financial data of BeGood in order to facilitate expansion and diversification. As you begin your research, you realize that many departments are involved in the information system, and communication is key.

Instructions

After attending the board of director's meeting, you learn the company is considering expanding into Canada and becoming a multinational corporation. In a memo to the board chair, discuss how multinational corporations have to set up an AIS with their foreign subsidiaries to provide the accounting information needed to plan, control, evaluate, and coordinate all business activities including government regulations and political climates. Also, summarize the issues that must be addressed regarding the company going multinational, and how that impacts the AIS for the company.

My Question:

1. How do multinational corporations have to set up an AIS with their foreign subsidiaries in order to provide the accounting information needed to plan, control, evaluate, and coordinate all business activities including government regulations and political climates?
2. What are the issues that must be addressed regarding a company going multinational and how does that impact the company's AIS?