Multinational Companies Risk Management And Internal Control

Accompanied with the economic globalization, advanced technologies and increasing competition, multinational corporations have become the principal parts of global business. Except for the advantages of globalization such as exchanging of worldwide resources, complementing of pros and cons in different nations, this business model also brings up risks in international business. Due to the difference of legislation, political and economic environments, social-cultural backgrounds among countries, relevant financial management and operation, as well as the enterprise risk management (ERM), are inevitable interfered by multiple unknown factors in such complicated environments. Therefore, the ERM is the crucial part of the management framework in multinational corporations, and is studied intensively as one of major topics in modern academic research and business application.This thesis bases the theoretical foundation in the report "COSO Enterprise Risk Management—Integrated Framework" published by Committee of Sponsoring Organizations of the Tread-way Commission in United States, and implements the method of case study to analyze the methods of ERM and internal control. The real-world business cases from the Avery Dennison (AD) Corporation are studied. The thesis consists of seven sections. Sections 1 briefly reviews the general research background of ERM. Section 2 focus on the ERM of multinational corporations, including topics like the methods of risk estimation, classification and new trends of risks. In Section 3, the basic theories of ERM and internal control with their relationship in the COSO report are discussed. From Sections 4 to 6, the business cases from the Avery Dennison Corporation are analyzed. The corresponding ERM and internal control are fully investigated based the theories of internal control, SOX act, COSO report, and ERM framework. Section 4 introduces the related corporation background and discusses her strength and deficiency in ERM. Using the knowledge of internal control, feasible solutions are presented for improvement. Section 5 studies the sharing service of financial center and how it works for ERM. The ERM of multinational corporations is also included. In Section 7, the information management system is discussed for its application in the enterprise risk management. In the end, Section 7 concludes the work of the whole thesis.