Chapters 1-3 Flashcards
Framework approach
Long time frame, prevention, principles driven, spirit of the law, grey, discretionary
rules based approach
short time frame, detection, law based, letter of the law, black and white, mandatory
Ethical framework for accountants in the Uk
Financial Reporting Council (FRC)
FRC member bodies
Professional Oversight Board (POB) - review regulatory activities of professional accounting bodies. Auditing Practices Board (APB) - establish auditing standards
Seven Principles of Public Life
Leadership, Honesty, Objectivity, Accountability, Integrity, Selflessness, Openness
CIMA Code of Ethics
Objectivity, Professional Competance, Confidentiality, Integrity, Professional Behavior (Obese Police Constable Caught Ingesting Pies and Burgers)
Reasons for Ethical Disputes
Self interest, self review, advocacy, familiarity, intimidation
UK Corporate Governance Code definition
a system by which companies are directed and controlled
Common themes behind corporate failures
dominant board members, weak boards, lack of stakeholder interaction, lack of internal controls, corporate greed
Principles of corporate governance
reduction of risk within companies, setting best practice for running companies, providing ethical framework for strategy, application of spirit of the code, increasing accountability, protecting investors and wider stakeholders
Symptoms of Poor Governance
domination of single member, lack of board involvement, lack of control, lack of supervision, lack of intependent scrutiny, lack of shareholder dialogue, emaphasis on short term targets, presentation of misleading accounts
UK Corporate Governance Principles
Leadership, effectiveness, accountability, remuneration, relations with shareholders
Unitary Board Structure
All Exec Board; Majority Exec Board; majority non-exec board (required by plc)
Two Tier Board
Supervisory board and management committee. Germany and France
Professional Oversight Board (POB)
- review regulatory activities of professional accounting bodies
