Managing a multinational company calls for the need to monitor financial statements. Accounting at this level becomes more dynamic, complex and multidimensional. Multinational companies are significant economic entities in most of the countries they operate in (CFA Institute, 2019) . Managerial accounting reports are essential for internal use. The company is therefore not required to follow Generally Accepted Accounting Principles (GAAP) guidelines when producing internal accounting reports. Some of the internal reports that can be used are routine reports which are submitted periodically (Shpak, 2018) . They address issues relating to production costs, sales, direct labor, operating costs. Having these reports periodically can help in adjusting the company in adjusting to situations more rapidly. Another type of internal reports is the special report which is used in making an investigation before making a drastic decision. On the other hand, external reports are prepared so as to give the basic understanding on accounting hence can be presented to shareholders and other external parties with ease (Bragg, 2018) . They can help in explaining why a certain decision was made. Internal accounting reports are associated with financial reporting. Therefore, external factors are able to pool in and give their opinion before a certain decision is made in the company.
Multinational corporations carry out their operations in a number of countries hence they require accounting reports that are more complex. Such reports are expected to enforce a high level of accountability. External reports generally look into profit loss statements, accounts payable and statement of cash flows (CFA Institute, 2019) . For a multinational corporation they indicate how the company may be doing in different regions based on the profits it is gaining. Internal reports are more internal and look into various segments rather than the overall evaluation of the company. This makes them useful for multinational corporations since every unit can be assessed individually. It becomes much easier to get more into details and analyze various issues in separate segments. Worldwide accounting causes more complexity for multinational companies in generating financial statements. Each foreign segment of the company has to have two sets of accounting books. Moreover, multinational companies are affected while trying to set up shop in other countries since they may be required to prepare the reports using local GAAP (CFA Institute, 2019) . Internal and external accounting reports of a multinational corporation operating abroad may be affected by the lack of comparability when making decisions on foreign acquisition. The use of foreign currency also requires special accounting treatment.
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References
Bragg, S. (2018). External reporting. Accounting Tools.
CFA Institute. (2019). Multinational Operations. Retrieved from CFA Institute: https://www.cfainstitute.org/membership/professional-development/refresher-readings/2019/multinational-operations
Shpak, S. (2018). The Differences between Financial Accounting & Management Accounting. Chron.
