The Roles Of The Finance Function in Organisation Flashcards
Types of Organizations
Profit Seeking
NFPO
Roles of the Finance Function
Enables an organization to create and preserve value through planning,forecasting and resource allocation.
Shapes how and organization creates and preserves value through performance management and control.
Narrates how and organization creates and preserves value through corporate financial reporting.
Define Ethics
Ethics is the system of morale principles that exams the concepts of right or wrong
Identify NFPO
Schools
Hospitals
Primary Objective of an NFPO
Maximize benefit to beneficiaries
Functions of an Organization
Operations Finance Sales and Marketing HR IT
Define Business Ethics
Is the application of ethical values to business behavior
What’s an ethical dilemma
Where a decision maker has to decide what is ‘right’ or ‘wrong’ thing to do
Examples of ethical dilemmas ….accounting issues
Creative Accounting to boost or suppress reported profits
Directors pay arrangements
Insider trading
Should bribes be facilitated
CIMA Code of Ethics (5 principles)
Integrity Objectivity Professional competence and due care Confidentiality Professional behavior
Define a stakeholder
Is a group or individual who has interest in what the organization does or an expectation of the organization
Three categories of stakeholders
Internal
External
Connected
Mendelow’s Matrix
Draw graph
Corporate Social Responsibility
A company should be sensitive to the needs and wants of all the stakeholders in its business operations not just shareholders
What is the UK scandal that led to corporate governance
BCCI
pollypeck
What is the US Scandal that led to corporate governance
Tredway Report
What is the primary reason for corporate governance
To protect stakeholders (shareholders,employees and pensioners) it is intended to remind directors of the limitations of their power
What decades were the corporate scandals in the UK
1980 1990
Illustrate the agency problem
Directors voting for pay increases and huge bonuses for achievement of modest targets.
Define Corporate Governance
The set of processes and policies by which a company is directed administered and controller. It included the appropriate roles of the board of directors and auditors of the company
