Transfer Pricing Risk Management from a Corporate Governance Perspective: An Integrative Review and Research Agenda
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Transfer pricing risk represents a critical vulnerability in multinational corporate governance, yet institutional mechanisms mitigating these exposures remain structurally fragmented across diverse regulatory environments. This study evaluated the formal integration of transfer pricing compliance within enterprise risk management frameworks through a systematic integrative review of contemporary corporate practices. The analysis demonstrates that board independence and audit committee financial expertise operate as the primary structural determinants in curbing opportunistic related party transactions. Furthermore, mandatory disclosure regulations alongside regional minority shareholder protections significantly constrain aggressive profit shifting behaviors, effectively substituting for weak internal corporate controls in specific institutional contexts. The findings indicate that assigning transfer pricing oversight exclusively to tax divisions generates substantial compliance blind spots. This research provides a novel theoretical synthesis positioning transfer pricing as an agency conflict issue, offering direct prescriptive guidance for regulatory authorities to mandate joint risk governance and enhance targeted audit strategies within complex multinational networks.
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