Darien Walker’s approach to audit Mercedes Benz U. S. International (MBUSI) exemplifies the business measurement process method. Walker begins with a strategic analysis of her client by conducting research on the SUV market and MBUSI’s business and strategic objectives.
Some important external forces in the industry include economic factors such as international oil prices, employment rate, interest rates, and inflation. Though faced with taxation and tariff complications, MBUSI enjoys a strong relationship with the state of Alabama government. The merger with Chrysler Corporation, on the other hand, poses several risks. Unionization and additional disclosures under GAAP reporting may significantly impact on the company’s operations.
The elevation of competition in the SUV segment may also lead to decreased market shares of the M-Class, however, high product quality and customer satisfaction would ensure the M-Class a niche within the market. Assembly and supply chain management are MBUSI’s core business processes, and a number of controls have been placed throughout these processes to ensure operational effectiveness and efficiency. MBUSI excels in its assembly line management through collaboration with workers and suppliers, as well as establishing and monitoring of key controls.
The company also enjoys a superb supply chain, mainly due to its close, integrated relationships with its suppliers. In addition, resource management processes, such as procurement and information management, are also crucial to the success of the company. From Walker’s risk-based strategic systems approach to audit MBUSI, there are two key takeaways. First, Walker’s comprehensive strategic analysis on MBUSI demonstrates that auditors must conduct extensive research about the client’s business and the environment of which it operates in.
The BMP audit approach would not otherwise work if auditors fail to become familiarizedwith the business entity. An example to demonstrate this point is the fall of Enron. Due to the gas industry’s complex business nature, Enron’s financial statements tend to be vague and confusing. By further obscuring its financial statements, Enron fools its auditors through easy manipulations. In hindsight, however, if the external auditors understood Enron’s business structure and industry, they would have detected the misstatements in financial results.
Finally,from MBUSI’s perspective, it is notable that the company’s integrative relationships with the employees, suppliers, and the state of Alabama government are the keys to success. MBUSI’s active engagement with these key players allows the company to leverage these relationships through its business processes to deliver “Mercedes-Benz quality” to its customers. Another company that successfully leveraged its relationships with internal and external parties is Starbucks Inc.