TY  - JOUR
T1  - Transfer Pricing and its Effect on Financial Reporting:
A Theoretical Analysis of Global Tax in Multinational Companies
AU - Talab, Hassnain Raghib AU - Flayyih, Hakeem Hammood AU - Yassir, Yassir Nori Mohammed 
JO  - International Business Management
VL  - 11
IS  - 4
SP  - 921
EP  - 928
PY  - 2017
DA  - 2001/08/19
SN  - 1993-5250
DO  - ibm.2017.921.928
UR  - https://makhillpublications.co/view-article.php?doi=ibm.2017.921.928
KW  - Transfer pricing
KW  -financial reporting
KW  -tax
KW  -corporate policy
KW  -multinational companies
AB  - The purpose of the study is to explore and analyse the influence of transfer pricing on financial
reporting in global tax from a theoretical point of view. Prior literature was used to develop a construct
indicating the degree of focus on the concepts of transfer pricing, the modern way of transfer pricing way, the
purpose of transfer pricing, the most common transfer pricing methods, determination and clarification as
regards transfer pricing issues, the rules of transfer pricing and its future consequence and an overview transfer
pricing in some selected countries. The results from literature review and an analysis of global tax in MNES
show that some rules of transfer pricing as recommended by OECD provide the next conditions that a
transaction must meet to fall below the transfer pricing principles. Multinational organizations can be of a very
planned advantage by having a parent company (the head office) and venture/associates or subsidiaries
operating in other countries/locations as a consolidated entity which linked companies (head offices and its
associate/joint/a subsidiary) taking its activities in different states/nations. Given the exploratory nature of the
research reported in this paper, there is an opportunity for further work on larger populations instead of
reducing the scope to four countries (Australia, India, Malaysia and Kazakhstan) in order to confirm the
generalizability of the findings. Also, this research has highlighted an association between the transfer pricing,
financial reporting, global tax in MNEs and this requires further investigation in terms of confirming suggested
cause and effect relationships. The existence of cross-border transactions in transfer pricing, the transaction
takes place between two associated MNEs will be a subject of goods, services or any other thing with economic
value. The existence of a link between a transfer pricing and financial reporting provides a potential route for
making effective corporate policy on global tax for those looking to improve organizational performance through
placing a greater emphasis on satisfying the MNEs. The absence of a link between transfer pricing and
corporate tax incentives of transfer pricing reveals that manipulation in transfer price will minimize profits
through sites worldwide. Transactions resulting from taxes and customs duties to provide an opportunity for
multinational corporations may increase the liability of tax. The exploratory research in this study and panel
study focuses on the link between transfer pricing and an area of global practices, namely, corporate tax in
Multinational companies that has received limited attention in prior studies.
ER  -