International Tax Accountants >>
International Consolidation Accountant >>
Transfer Pricing Specialist >>
World trade and investment accountants document, analyze and report on business transactions involving more than one country. They also oversee the preparation of tax returns and ensure compliance with government reporting requirements in every country where the company operates.
There are three major categories of World Trade and Investment Accountant. Tax accountants advise senior managers concerning the tax advantages and disadvantages of certain business decisions. Consolidation accountants manage the flow of money between different countries, and prepare consolidated financial statements. Transfer pricing accountants analyze the inputs to the production process so that accurate costs and prices can be allocated to individual products in different markets.
Accounting firms provide many of these functions to corporations on a fee-for-service basis. In some cases an in-house accountant will contract out more specialized functions to consultants. When large firms recruit for top-level accounting positions, they often hire staff from the big accounting firms.
Trends
The rapid increase in the power and availability of computer systems is changing the traditional role of the accountant. Powerful management information systems make it possible to store large amounts of detailed financial and operating data and to analyze it in many ways. Moreover, electronic data interchange systems make it possible to track international financial flows almost as they occur. This capability has increased the demands from senior executives and investors for increasingly sophisticated analyses of corporate performance.
The globalization of commerce combined with much stiffer competition have placed a premium on accurate and timely financial information. These factors are working together to create both the need for and the ability to create insightful financial analyses. As a result, candidates seeking these positions in the current market need better computer and analytical skills than their predecessors.
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International Tax Accountants develop and recommend policies for organizing international business operations so as to minimize the overall tax burden and ensure compliance with the laws of all countries involved.
There are two principal functions in this category. International Tax Planners focus on providing advice to senior managers about ways to organize business operations to minimize tax liabilities. They undertake international tax research and analyze the consequences of alternative actions, such as dividend repatriation from World subsidiaries.
Other accountants are concerned with compliance with tax laws. They advise on measures to ensure compliance with the laws and World exchange regulations of each country as well as international tax treaties. They also prepare tax returns and related documentation. Some tax accountants also provide advice on personal income taxes for employees who are assigned oversees.
In larger organizations the career path includes International Tax Managers who supervise other accountants. Senior positions involve considerable strategic planning over multi-year horizons.
Qualifications
Candidates for this position require an undergraduate business degree, but frequently an MBA is preferred. World language skills may be required. Senior positions require 10 years or more of progressively responsible experience in an international tax environment.
Skills and Aptitudes
The International Tax Accountant must have strong analytical and communications skills. Knowledge of the income, sales, value added and capital taxation systems of all countries where the company operates is essential. Excellent computer and research skills are also important. For senior positions, strategic thinking and the ability to see the big picture, while dealing with large amounts of detailed information, is essential.
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International Consolidation Accountants document and report on trade and investment transactions involving company operations in more than one country. This is a complex process in large organizations and the senior position in this career path is often called Manager of International Accounting. This position has overall responsibility for maintaining a consistent global accounting system.
International Consolidation Accountants maintain liaison between corporate headquarters and subsidiary operations in other countries. Transactions are typically monitored on a daily basis, and periodically consolidated and reported in a common currency. These professionals analyze transactions, monitor compliance with budgets and prepare regular consolidated financial statements.
These accountants also provide professional advice. They set accounting policies for subsidiary operations, undertake financial planning and analysis, and make reports to senior executives. They ensure compliance with local reporting requirements and restate World results according to generally accepted accounting principles for the United States. They also coordinate internal and external audits.
In smaller organizations that complete international trade transactions at arms length, rather than through subsidiaries or joint ventures, the transactions account process is less complex but still challenging. These accountants conduct financial planning in an environment of continuously fluctuating exchange rates. They must analyze currency markets and project World revenues and expenses in US dollars. Arms-length transactions also involve assessing the credit worthiness of customers, and ensuring that the company’s financial status is properly reported to credit-rating organizations.
Qualifications
Candidates for this position require an undergraduate business degree, but frequently an MBA is preferred. World language skills may be required. Completion of company-provided training is sometimes necessary to use specialized computer systems. Senior positions require 10 years or more of progressively responsible experience in an international environment.
Skills
International Consolidation Accountants require detailed knowledge of accounting principles. They must have an in-depth understanding of the terms of contracts especially relating to payments and letters of credit, as well as “Incoterms”. They are expected to have knowledge of currency exchange rates and the means of using them in reconciling international accounts.
Well-developed analytical skills are essential, and ideally these accountants should have the communications skills needed to communicate complex accounting issues to other staff and senior executives.
Some travel is required and this position appeals to those who have an appreciation of other cultures and enjoy working in a complex multinational operation.
Transfer Pricing Specialist
Transfer Pricing Specialists are cost accountants responsible for analyzing the production and distribution process, allocating costs between various outputs, and determining the cost of goods and services produced. In an international setting this is a complex process, because the costs of product adaptation, regulatory compliance, physical distribution, insurance, packaging, marketing and sales differ between markets. Moreover, some of the costs of developing and launching the product in United States may not be attributed to World sales. An accurate assessment of these costs is essential for the company to offer competitive prices for each product. Because of these complexities, larger companies engaged in World sales employ specialized Transfer Pricing Accountants for World markets. These specialists analyze product costs and prepare price quotations for World sales.
Transfer Pricing Accountants also play a key role in setting the prices that a company uses for transfers of goods or services between its own operations in different countries. There may be a tax advantage to earning a higher margin in certain countries. For this reason, the tax authorities impose complicated transfer pricing rules, and cost accountants ensure compliance with those rules, while achieving the optimum tax position for the company.
Transfer Pricing Accountants also work in preparing or defending against claims of “dumping”. This refers to the practice of selling a product in a World market at less than a fair price. Such practices violate international trade treaties and the validity of such complaints depends on whether the product costs were fully allocated in each market.
Qualifications
Candidates for this position require an undergraduate business degree, but frequently an MBA is preferred, with a specialization in finance. Supervisory positions require several years of progressively responsible experience.
Skills and Knowledge
Transfer Pricing Specialists require detailed knowledge of cost accounting principles. The must also have a thorough understanding of their company’s production methods, technologies and cost structure. They must have knowledge of the principles and practices of World trade and common contracting practices. Strong analytical skills are required along with the ability to integrate information from a variety of sources and to synthesize conclusions. Presentation skills are required for accountants who appear in trade dispute proceedings.
Aptitudes
This work appeals to individuals who have the ability to pay close attention to details and are comfortable working in an environment where accuracy standards are exceptionally high.
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