Skip to content

ACCA Strategic Professional · Advanced Financial Management · Strategic business and financial planning for multinational organisations

Norvik plc, a multinational, is deciding whether its overseas subsidiaries should be assessed on the basis of local-currency results or results translated into the parent's currency. Which responsibility of the senior financial adviser is most directly engaged when advising on how to align subsidiary performance targets with the group's overall objective of maximising shareholder wealth?

The adviser's role is to align subsidiary targets with the group's shareholder wealth objective, so units do not take locally attractive but group-damaging decisions. Statutory accounts, daily currency dealing and audit scoping are operational or compliance tasks rather than the strategic advisory responsibility.

  1. AEnsuring that subsidiary targets are consistent with group-level financial strategy and avoid sub-optimal decisions by individual unitsCorrect
  2. BPreparing the statutory financial statements of each subsidiary under local GAAP
  3. CExecuting daily foreign currency purchases for each subsidiary
  4. DDetermining the audit scope for each overseas subsidiary

Explanation

A senior financial adviser must ensure that goals and targets set for subsidiaries support the group objective of shareholder wealth maximisation, avoiding dysfunctional local optimisation. The other options are routine accounting, treasury dealing or audit tasks, not the strategic advisory role.

Did you get it right without looking?

One question tells you little. A timed set on Strategic business and financial planning for multinational organisations shows your real accuracy, how long you take and where you lose marks.

Practise Strategic business and financial planning for multinational organisationsFree diagnostic mock

More Strategic business and financial planning for multinational organisations questions