branch

An operational or administrative unit of an organization. Many *multi-national corporations have branches around the world, and *control over remote operating units of this nature present particular challenges to auditors. Organizational *risks are magnified for branches separated from their head offices by (i) large geographical distances, (ii) cultural dissonance, (iii) linguistic differences, (iv) variations in local laws, regulations, and taxation, (v) differences in *Generally Accepted Accounting Principles, and (vi) differences in *Generally Accepted Auditing Standards. The degree of *decentralization and the level of autonomy granted to the managers of individual branches can also complicate an organization’s *internal control environment. Control over branches is sometimes effected by the supervisory role of *divisional groups. Further reading: O’Regan (2003a)