Financial Reporting, Tax, Corp Gov

Question 1

What is Corporate Governance?

Answer 1

The means by which company is operated and controlled. (Who rules the company)

Question 2

What are the key principles of Corporate Governance?

Answer 2

• Leadership
  -Accountability
  -Remuneration (salary/pay)
  -Shareholder Relationships
  -Effectiveness of Board of Directors

Question 3

How does Corporate Governance affect companies?

Answer 3

Allows companies to be run well in interests of various stakeholders

Question 4

What is the meaning of Leadership?

Answer 4

-Effective leadership consists of board of directors with executive and non executive directors
-Collective decision making with split of responsibilities

(KANNAN would benefit from appoitnment of directors and proper board to help with decision making)

Question 5

What makes an effective board of Directors?

Answer 5

-Board with high skillset, experience and expertise

(Kannan has restricted board setup so would benefit from this)

Question 6

What is the meaning of Accountability?

Answer 6

-Board should be accountable for decisions.

-Has to maintain risk and internal controls of systems

Question 7

Why is Remnuneration(salary/pay) important?

Answer 7

-It needs to be adequate to retain and recruit individuals of good standard without being excessive

Question 8

What is Relations with Shareholders?

Answer 8

-Board has responsibility to ensure effective dialogue with shareholders.

(KANNAN needs to provide relevant and reliable reports so shareholders can assess investment properly)

Question 9

Why is Corporate Governance important?

Answer 9

-Lack of Corp Governance makes company untrustworthy

-Low corp governance damages reputation

Question 10

What are 3 key elements of corporate governance?

Answer 10

-how they manage internal processes
-decision making
-Disclosure of info

Question 11

What are the 5 codes of Ethics?

Answer 11

• Promote Ethical culture
• Enhance Transparency (openess & honesty)
  -Strengthen board oversight
  -Engage with Stakeholders
  -Establish governance Framework

Question 12

What financial reporting does Kannan hold?

Answer 12

Kannan holds IAS 16 (property, plant, equipment)

Question 13

What are the 2 differences between Asset Impairment and Asset Revaluation?

Answer 13

1) -Revaluation can happen at any point in time

-Impairment requires review whether there is indication it may be impaired

2) -Revaluation can INCREASE assets value or DECREASE value to market.

-Impairment only refers to DOWNWARD/FALL in market value.

Question 14

How is Asset Impairment usually indicated?

Answer 14

• Decline in Market value
  -tech, legal or economic changes
  -physical damage

Question 15

What are the main 2 Tax implications?

Answer 15

• Asset Impairment (IAS 36)
  -Asset Revaluation (IAS 16)

Question 16

What is the affect of IAS 16 (Revaluation)?

Answer 16

-After revaluation, tax depreciation may have to be adjusted based on new carrying amount of assets.

Question 17

What is the affect of Asset Impairment (IAS 36) ?

Answer 17

The amount of assets exceeds the recoverable amount.