Final answer:
The two major accounting challenges for companies with international operations are currency exchange rates and international tax regulations, due to the need to convert earnings into local currencies and comply with diverse tax laws, while also considering the broader impact of foreign trade on political relations and social issues.
Step-by-step explanation:
The two major accounting challenges that arise when companies have international operations are currency exchange rates and international tax regulations. When firms engage in international trade, they must often deal with the complexities of different currencies. For example, a Chinese firm exporting goods will earn revenue in a foreign currency, such as U.S. dollars, but will have to convert these earnings into Chinese yuan to pay its local workers, suppliers, and investors. This situation places the firm in the position of both supplying dollars and demanding yuan within the foreign exchange markets. Moreover, international operations bring about challenges in navigating tax laws across different countries, which can be profoundly diverse and complex. Companies must understand and comply with the tax regulations of each country they operate in to avoid violations and penalties, adding another layer of complexity to international business accounting. It is also worth noting issues like job loss, environmental concerns, and unfair labor practices that pose barriers to foreign trade and impact political relations between nations. These challenges highlight the intricacy of managing international operations beyond just the financial aspects.