Internal Billing 1276
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Intercompany transactions, related party transactions, transfer pricing issues and transfers between processes and functions must be understood and controlled to comply with SOX requirements.
However, SOX does not impact inequities in transfer pricing or address ‘fairness’ of pricing arrangements among departments/units. To the extent that transfer pricing information is accurately reported, conforms with GAAP, and meets the basic financial statement assertions (presentation and disclosure, rights/obligations, existence/occurrence, valuation/accuracy, completness), no SOX issue is created in connection with transfer-pricing issues.
If anyone else has further insight, please chime in.
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transfer pricing should only impact your consolidated income tax rate as you move income or expense from one taxing jusridiction to another. this would impact ICOFR based on the aggressiveness of moving net income to a lower tax jurisdiction and how well you can support your position.
intercompany transactions only impact ICOFR to the extent that they are reconciled regularly and all timing / reconciling differences are explained and appropriate entries are made to eliminate any interco out-of-balance conditions.