Wiley CIAexcel Exam Review 2014: Part 3, Internal Audit Knowledge Elements

DOMAIN 8

Global Business Environment (0–10%)

8.1 Economic/Financial Environments

8.2 Cultural/Political Environments

8.3 Legal and Economic Concepts

8.4 Impact of Government Legislation and Regulation on Business

8.5 Sample Practice Questions

8.1 Economic/Financial Environments

Topics such as organization structures, types of international strategies, international strategic and tactical objectives, technology and global strategy, and forms of international business and marketing strategies are presented in this section.

(a) Organization Structures

The organization structure of the multinational corporation (MNC) evolves over time due to changes in economic policies, tax laws, government regulations, and political structures. The organizational structure of the MNC varies; each manager’s level has a varied degree of authority and responsibility.

MNCs are firms with significant foreign direct investment assets. They are characterized by their ability to derive and transfer capital resources worldwide and to operate facilities of production and penetrate markets in more than one country, usually on a global scale. Over the past 30 years, many writers have argued over the best name to use in referring to these companies. “Multinational enterprise” (MNE) has been a popular term because it reflects the fact that many global firms are not, technically speaking, “corporations.” The terms “transnational corporation” and “supranational corporation” are often used within the United Nations ...