Brazil boasts of having the largest economy in Latin America and the ninth largest in the world. The gross national product of the country is approximately $800 billion with a real annual growth rate of 3 percent. Brazil has a large population and more people live in Brazil than the entire population of other countries in the Southern American nations. Brazil has a different culture and have different ways of doing things compared to that of the United States. They have different notions of what can be considered respectful or disrespectful. They look at things differently and have different ways of exposing their personality. This paper analyzes how Brazil differs culturally in terms of business practice from the US and the use and implementation of the IFRS.
Business cultural differences between Brazil and the United States
One way that Brazilians differ from the United States is in the level of personal interactions when conducting their business endeavors. Brazilians have been known to devote their time to know the person whom they are doing business with while Americans do not see the need to develop personal interactions. Brazilians have to get to know and thus trust their business partners. Connection with the person is important and the deal could be called off without proper connection. A new business partnership takes time and the individuals will have to spend a lot of time having coffee and dining.
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On the other hand, Americans do not develop personal connections when carrying out their business endeavors. They try to separate their business from personal life no matter what it would take. Business is all about getting the work done without being concerned about what it would take.
Etiquette in the Brazilian culture is highly important because it can be used to denote status and class. No matter their income, a person is expected to carry themselves in a way that shows class. When working with government officials, protocols and etiquette should be followed and studied. A more formal culture would be used to judge and dictate how one behaves. The American business culture is different because it is less formal. Business dinners and lunches are usually more casual. There is no significant expectation to behave in a certain way like that in Brazil.
The corporate culture in the Brazilian culture follows respect and hierarchy at work. While people can work together and have a close relationship with their employees, they rarely question their managers. Higher level executives rarely blend with low-level employees and executives are usually addressed by their surnames and titles. The American culture follows an open-door policy and the work environment is less hierarchical. Employees in some companies do not even have titles. The main objective is to get the work done and titles are rarely considered because they can get in the way. Companies that are more corporate in the United States follow hierarchy but not to the extent followed in Brazil.
The formal business culture in the Brazilian environment can be seen in their dress code. The dress code in the Brazilian culture can be seen at the managerial level according to how they dress. A person with a higher occupation feels obligated to dress more. Non-managers will adopt the business casual look and never opt for genes. On the other hand, most American companies have adopted the casual business look of business where they can wear jeans and showcase their personality through their clothing. The business wear depends on the industry and some big cities like New York can be seen to have men and women in suits. However, this may not be the case for all companies.
The use and implementation of IFRS
Brazil adopted the International Financial Reporting Standards (IFRS) in April 2011. Brazilian initially used the GAAP but passed the law to change to IFRS in December 2007. Brazil has since adopted the IFRS Standards for most of its companies whose securities are traded publicly. Financial institutions that are regulated by the Brazilian Central Bank were also required to have an audit committee and to present their consolidated financial statements according to the IFRS from the year 2010. Statutory accounts are also required to follow the accounting practices. Other financial institutions which are not listed are not required to have an audit committee and have no obligation to prepare their financial statements in accordance with IFRS. In case the unlisted entry is the leader of a conglomerate entity or group which includes a listed entity, the IFRS requirements are required. The requirements also applied to foreign companies whose securities are traded in Brazil.
The change to IFRS has enabled for accounting information in the country to have a higher quality and transparency. Brazil companies have since noticed the improvements in accounting information after the adoption of the IFRS. The adoption of the IFRS contributes significantly to the improvement of the company image. Preparers of the financial statements in Brazil have seen the benefits of implementing the IFRS. It has enhanced a more simplified approach to bookkeeping. Analysts of the document can trust the published statements and audited reports more. The IFRS financial statements are also beneficial for micro companies and small-sized enterprises. It enables them to make accurate internal decisions.
In conclusion, the Brazilian business culture is different from that of the United States. Brazilians prefer personal contacts when conducting their businesses. This is different from the American culture that separate business and personal life. The Brazilian culture is also formal, more hierarchical and dressing is also formal. This is different from the American culture that is more laid back and casual and puts a high priority on the completion of work. Brazil is also different because it follows the accounting standards of IFRS. The use and implementation of those standards have been beneficial in ensuring better quality and transparency in the accounting information.
