Travelling by taxi was an interesting
experience. The car horns seem to be used
more frequently than the brakes. The taxis
do not have seat belts and lane markings
and traffic lights appear to be for decorative purposes only.
Paradoxically, all the taxis display advertisements for plastic surgery, something
that may be needed after a short trip!
In the evening Dalian comes alive; the
grand buildings lining the streets are lit up
in a scene reminiscent of Hong Kong. The
skyscrapers become huge electronic bill
boards and the smoky restaurants thrive
with the noise of chatter and eating.
Arriving at the offices where the exam
was to take place, we were welcomed
by our contacts with the traditional
presentation of business cards. This is a
ritual in itself.
At first, it seemed that the client would
not be forthcoming with information and
they questioned the relevance of each
item requested. After time, as is normally
the case, the relationship strengthened
and the process became much easier.
We soon learned the importance and
necessity of having both linguistic and
cultural support. Whilst all of the financial
reporting was in English, much of the third-party documentation was in Mandarin.
We came to understand that the business had been structured for tax efficiency
purposes. This was entirely in keeping with
The business was registered in Hong
Kong, but operated from a representative office in Dalian. Understanding the
accounting protocols to comply with local
taxation requirements was an important
part of the process. Having local advisors
on hand allowed us to verify the validity of
This and other accounting practices
made this exam far from straight forward.
Fortunately our local contacts are very experienced in auditing businesses in China
and we were able to reconcile accounting
entries through to the lender’s collateral
At this moment I hold the distinction
within Atlantic RMS of having conducted
a field exam in the most unusual location
(previous holders included Russia and
We are now on to our fourth piece of
work in Southeast Asia and we are glad
to be able to extend our reach with the
knowledge that we have boots on the
ground to deal with the logistical, cultural
and linguistic challenges.
There has been a lot of practical learning from this particular review and I want
to share with you some tips which may
prove helpful for the preparation of your
field exams in far-flung locations:
1.;Planning. I know that this can be
difficult, especially when a field exam
is arranged at short notice, but the
benefits of careful planning can never
be underestimated. This needs to
happen at the front of any geographically challenged exam. One important
question: how long does it take to
obtain a visa? Consider the fact that
Chinese and Russian visas generally
need to be issued in person. Many
visas require you to surrender your
passport for a few days, which can
complicate any ongoing travel commitments.
2.;Location, Location, Location:
a. Where is the field exam to take place?
b. How do you get there? Train, plane,
c. How long does it take to get there?
d. Can you get there? What are the
visa requirements for the country to
which you are travelling?
e. Do you need any immunisation/
health clearance, i.e. in parts of Africa,
you need evidence of yellow fever
vaccination to enter.
f. What is the time zone? This is an es-
sential consideration. Hong Kong to
Chicago is a 13-hour difference which
can create some real-time communi-
g. Are you sure that the ingredients
you need to review are in this loca-
tion? It is not unheard of for paper-
work to be in one location, systems
in another and key staff somewhere
else. That is a major problem both in
terms of time and cost.
h. What are the communications like
at the site (telephone, internet ac-
cess)? Consider reliability, suitability
3.;Local customs, culture & protocols
a. National/regional holiday, i.e. Italy
and Spain have a number of Saints Days
which will affect the working week.
b. Industrial & political considerations
– sadly a byproduct of the current
climate. Consider Spain & Greece, where
national strikes affect transport, immigration and communications. Political
action in the Middle East makes certain
locations, even commercial ones, unpredictable, i.e. Egypt and Turkey.
c. Manners and dress – beware any
offence or discourtesy. In the Far East
a formal exchange of business cards is
the precursor to any meeting. Always
check if there is any accepted business
4.;Language – not just direct spoken communication with key staff, but translation of source documentation, without
which the exam would have ground to a
halt. The China field exam was a perfect
example of the importance of getting
this right. Remember many countries
have regional/local language variations.
5.;Tax Rules and Regulations – consider national/regional/local tax
Adam Clancy is a senior auditor for
AtlanticRMS based in London, England.