Responsibility Accounting and Transfer Pricing

Lower level of members within an organisation who have a low level of trust don’t believe that higher management will create favourable outcomes and the individual with low level of trust will need to take further action.

The solution adopted by many companies is to move toward greater delegation. Yet it is difficult for top managers to give up responsibility. And lower-level managers are not accustomed for making decisions for themselves. As a result many companies struggle during this revolutionary period, because many lower level employees leave the organization since they stick to centralized methods.

The "transfer pricing" provision attempts to identify the taxable income had the transaction been between unrelated parties dealing at arm's length.

A. Allows a firm to perform similar activities differently than its rivals with resulting lower costs

I updated the spreadsheet based on Mary Jo’s file of the NPS transfer breakdown. I added a new sheet to Patrick’s file (copy of transfers vs billing Est by agency ) Transfer vs Billing FY 15-16.Please review and let me know the Agency NPS transfer amounts are correct. We needed to turn around the file as soon as possible because we have a meeting scheduled with Mahesh tomorrow at 2

For a company to be successful in the long term today, they must be diverse. The company needs to be able to adapt to changes. The need for these changes can present themselves from many angles. Some would include changes in the economy, marketing, or even a change in the target audience. A company has to look at more than just the four levels of management. Organizations must look at how internal and external factors can affect the four levels of management, and adjust accordingly for these changes to be successful in today 's world.

Transfer pricing necessarily results from the exchanges of goods and services among the decentralized units of company.

Due to the information, 20 acres of land equal 80 sheep according to the exchange rate of last year, a one-room cabin equal 3 acres of land and equal 12 sheep finally, a plow equals 2 goat and equal 2/3 sheep according to last year’s exchange rate and 2 carts which were traded with a poor acre of land equals 8 sheep plus 400 sheep. So Deyonne’s total assets are 500(2/3) sheep. Deyonne’s liabilities and assets deduction are 35 sheep plus 3 sheep, which will come to 38 sheep,

Hierarchy in an organization is seen as reflecting inherent inequalities, centralization is popular, subordinates expect to be told what to do and the ideal boss is a benevolent autocrat.

An organizational structure is the outline of a company’s framework and guidelines for managing business operations. An organization 's structure and its degree of centralization or decentralization depend on a number of factors, including the size of the organization and its geographic dispersion. In a very large and diversified organization, it is unlikely that a handful of people will possess all the resources to achieve all goals and objectives of the enterprise. As a result, it becomes impractical to concentrate power and decision-making authority at the top. Similarly in a geographically-dispersed organization, a centralized approach will not be the most efficient, as the people with the most authority will be unable to directly supervise operations on a day-to-day basis.

The major problem every company encounters is the structure or hierarchy of the organization. Usually, it is in the form of a pyramid and gets narrower as it rises resulting in the few people on the top of the pyramid gets more advantages in the company. But the lower level employees are not given that importance when it comes to the utilization of the benefits provided by the company.

* Management needs to be transparent and make sure to communicate with employees, especially when the organizations is making

Transfer pricing is one of the key factors of a management control system, which helps a company to achieve its goals, including profit maximization and tax minimization.

As a business management, strategist discuss and advice on how to deal with this Issue.

By: Charn Gek Cheng, Chiang Soo Ling, Kummar Sokali Muthu Mogan, Lee Siew Fen Samantha