February 2012

Heightening Cultural Awareness

By Michael D. Marinaccio

An audit director at a global manufacturing firm considers the impact of cultural differences on the success of an audit at one of the company's foreign affiliates.


Bob is an audit director for a global manufacturer of consumer products headquartered in the United States with worldwide operations in Europe, Asia, and Latin America. The company maintains 30 local affiliate offices in 18 countries, has four manufacturing facilities, and employs more 20,000 people. Its annual revenue in 2010 exceeded US $25 billion.

Bob reports to the chief audit executive, who is a strong proponent of cultural diversity. He believes that diversity presents a unique opportunity for the organization to mix staff and cross-pollinate cultures throughout the organization. The company’s senior managers are also strong supporters of this philosophy, believing that it is important to developing future leaders.

Bob has found that developing the cultural competency of his internal audit teams is one of the most challenging aspects of working globally. What seems effective in dealing with one culture is often ineffective, or even inappropriate, in others. Also, when conducting global affiliate site audits with such a diverse audit team, he has had to overcome some formidable challenges. These have included not only language differences, but cultural nuances and the attitudes affiliate management has exhibited toward being audited.

Bob’s latest assignment is overseeing an engagement at one of the company’s foreign affiliates. His audit team is culturally integrated and diverse, including men and women from the United States, Europe, and Asia. Most of the non-U.S. audit team members speak English as a second language; likewise in the affiliate, English while understood is rarely spoken. All of the audit evidence and documents to be reviewed including contracts, invoices, and other source documents are in the local office’s native language. Bob has hired a bilingual, local auditor from a global accounting firm to assist the visiting audit team with the engagement and the translation of documents being reviewed.

Bob has instructed his audit team to be sensitive to how the affiliate’s management and employees think and act. At the same time, he wants to ensure the success of the audit engagement, secure the commitment and cooperation from the affiliate, and head-off any potential cultural issues that might negatively impact the audit.

What are some of the issues and challenges Bob might be facing? What can he do to best handle them?

Share your comments below.

 


Cultural Awareness article comments
Hi. Like Bob, I also work for a manufacturing company with a global footprint. Two key things that help me get cooperation and respect from my international colleagues is to look up the cultural etiquette of the country I am visiting (http://www.ediplomat.com/np/cultural_etiquette/cultural_etiquette.htm) and to try to learn some of the courtesy words and numbers in the native language. When interacting with my colleagues in English, I speak a little slower and annunciate my words more to help make myself understandable. Also, being calm and not acting frantic goes a long way.
Posted By: Ed Henry
2012-10-04 12:14 PM
Cultural issues
I tool I've found useful in building understanding on culturally diverse tols is Globesmart. I've found it useful to have the individual team members profile themselves and then share the results with the team and discuss it. I've also found it useful to review the profiles for diffrent countries and have open discussions as to what that means in the day to day matters such as how you should communicate (e.g., email vs phone vs face-to-face), who you should involve in conversations, tone that should be used in messages and the like. Not everyone has access to Globesmart, but there's lot of free information on the internet that can accomplish the same. Another approach I've found useful is having team cultural discussions over lunch. You pick a scenario and asks different team members how they would handle it within their culture and why. This often opens up perspectives in ways that reading about it just can't. Good luck.
Posted By: Tiffany Crosby
2012-02-14 10:07 AM
Cultural issues
I believe in being careful of cultural aspects, the way we ask questions in a foreign company. The auditor's rol is delicate and much more if we are auditing people from a different culture.
Posted By: Frank Fallas
2012-02-02 8:50 AM


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