Chapter 4 Flashcards
what is the process by which company objectives are established, achieved and monitored?
Corporate governance
what ways does the corporate framework in the UK operate?
- Legislation (Companies act 2006)
- Regulation (London stock exchange)
-UK corporate governance code
Who is the head of the audit committee
Non-executive directors
What is an external auditor
if you’re turnover exceed 10 million usually external accounting firm have to review and state if true and fIr
what does an external auditor do
Look at the money in the money out and has been selected by the board
What things do internal auditors look at
Money in the money out, whether underwriting authorities met, whether things are completed
Who do internal auditors report to
Reports to executive director and head of audit committee
2018 uk corporate governance code
division of responsibilities main points?
- chair of the board is responsible for overall effectiveness
- ensure directors get accurate, timely and clear information
- board should have executive and non executive directors
2018 uk corporate governance code
audit, risk and internal control main points?
- board should establish formal and transparent polices to insure independence and effectiveness of audit
- board should establish procedures to manage risk and oversee control framework
in risk would should companies do?
- identify any material uncertainties in their ability to trade
- access their principle risks and explain how they are managed
- state whether they are able to continue in operation
- monitor their risk management polices
what is not part of the legal requirements but is part of the stock exchange listing rules?
compliance with the corporate governance code
what is the Turnbull guidance?
it set out the best practice on internal control for uk listed companies
what code is used when you are a mutual insurance company?
AFM annotated corporate governance code for mutual insurers
what are uk listing rules?
produce half yearly financial reports and annual reports
what does the companies act 2006 include?
company formation
statutory reporting
company meetings
responsibilities of company directors and offices
what is a company secretary?
guides the chairman and board on their responsibilities
ensures good information flows
maintains stakeholder management
monitors changes
administration
what is known as the first line of defence in risk management
front line managers to ensure that risks are identified and controlled
How does a corporate governance framework operate through legislation
Companies act 2006
How does Corporate governance framework work through regulation
Listed companies with a London stock exchange
How does corporate governance framework operate a general principles
Uk corporate governance code which is the responsibility of the financial reporting council
What happens of a corporate governance framework companies are not listed on the London stock exchange
They can adopt equivalent approaches to corporate governance to those that are listed as a UK corporate governance code is considered to represent best practice standards
What is corporate governance
How we govern ourselves
What rules are implemented for corporate governance
Internal rules to implement protocols be put in place such as audits to ensure governing themselves
What must UK companies do To quote on stock exchange
Must follow UK corporate governance however this is a code not a law
