Management and Business Measurement Process

Topics: Management, Auditing, Business Pages: 2 (546 words) Published: October 23, 2012
DEPARTMENT OF ACCOUNTANCY
UNIVERSITY OF ILLINOIS
MEMORANDUM

TO:
FROM:
DATE:
SUBJECT:  Business Measurement Process for Mercedes-Benz

KPMG'S BUSINESS MEASUREMENT PROCESS
KPMG’s Business Measurement Process (BMP) is a holistic audit approach that focuseson auditor’s knowledge of client’s business and industry. Under this process, external auditors not only embrace the audit risk model to examine individual parts of accounting transactions, but also use an entity-based business orientation to analyze the dynamics of the business entity as a whole. Furthermore, Business Measurement Process emphasizes the review of strategies and business process indicators to assess the client’s performance. The approach also looks beyond the financial-statement opinions and focuses on mitigation of non-financial risks in a broader business context. AUDITING MBUSI UNDER THE BMP APPROACH

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...
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