Section B: Corporate Governance, Controls And Corporate Social Responsibility Flashcards
Why are corporate governance rules required?
Because management need encouragement to act in the best interest of all stakeholders.
What is shareholder activism?
The level of involvement shareholder shave in the running of the company.
What is the purpose of the OECD principles?
Act as a benchmark to ensure that national codes all comply with generally accepted best practice
What structure does the UK corporate governance code recommend for remuneration committees of large companies?
There should be at least 3 NEDS.
Which UK report on corporate governance focused on the role of NEDS?
Higgs report
What structure does the UK corporate governance code recommend for audit committees of large companies?
At least 3 NEDS
The King Report on corporate governance is which country’s approach to corporate governance?
South Africa.
How many board memberships should a current FTSE100 executive hold?
Only 1
What measure did the Sarbanes Oxley act introduce?
Companies must have an audit committee to trade.
What is the most common board structure for UK companies?
Single (Unitary) Board.
What are 3 sections of the King Code of Corporate governance?
Governance of risk, IT & Integrated reporting
What is the title given to a NED whom shareholders can contact outside of normal channels?
Senior Independent Director
What is the primary responsibility of Ext Audit?
To report to shareholders on whether the clients financial statements are accurate and free from bias.
What are substantive tests designed to accomplish?
To identify errors and omissions in financial statements
The susceptibility of a transaction to material misstatement is known as?
Inherent risk.
What are the 3 overarching criteria that an audit report is looking to confirm?
Factual
Free from bias
Reflect the commercial substance of the business transactions
What % of after tax profit is classed as material?
6%
According to CIMA, what % of revenue may organisations be losing to fraud?
7%
What element of a report defines the scope of an investigation?
Terms of reference
What is an example of a test of control?
Re-performing transactions
What are the G4 sustainability reporting guidelines?
Economic
Environmental
Social
What are OECD’s principles of CSR?
Respect human rights
Encourage local capacity building
Encourage human capital formation
What is the name of the international agreement which sets binding emissions targets?
Kyoto protocol
What are the 3 aspects of the triple bottom line?
Economic prosperity
Social justice
Environmental quality
Which body issued guidance on CSR?
OECD
