In choosing which transfer pricing system to use, a firm should be less concerned about finding the "right" transfer-pricing mechanism and be more concerned about choosing a transfer-pricing policy that creates the fewest management problems.

Question

Quizplus · Accepted Answer

The statement is true. Ultimately, the goal of a transfer pricing policy is to facilitate the efficient operation of the multinational corporation, and the mechanism used should be one that causes the fewest disruptions within the organization. Therefore, the focus should be on choosing a policy that works best in the specific circumstances of the company rather than seeking the "perfect" transfer pricing system.

In Choosing Which Transfer Pricing System to Use, a Firm