Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

After series of corporate governance failures and the abuse of trust placed in the management of public companies in the late 1990s and the early

After series of corporate governance failures and the abuse of trust placed in the management of public companies in the late 1990s and the early parts of the 2000s, regulators sought to change the rules surrounding the governance of companies.

In US the Sarbanes Oxley Act (2002) (SOX) introduced a set of rigorous corporate governance laws, while, in the UK, the Combined Code (Currently the UK corporate governance Code) introduced a set of best practice corporate governance initiatives, reflecting major changes in Corporate Governance. The aim is to ensure that companies are run well in the interests of their shareholders and other stakeholders. The focal point of this era of corporate governance rests on the following:

  • Responsibilities of directors
  • Appropriate composition of the board
  • Necessity for good internal control
  • Necessity for an audit committee
  • Relationships with the external auditors

Effectively, this brings to bear the Six Principles of OECD Framework, which are:

  • Ensuring the basis for an effective corporate governance
  • The rights of shareholders and key ownership functions
  • The equitable treatment of shareholders
  • The role of stakeholder in corporate governance
  • Disclosure and transparency & accountability
  • The responsibilities of the Board

Principally, these dynamics in corporate governance sets the pace for global acceptance of such principles for effective management of companies with particular focus on:

  • Segregation of Chairmans role from that of the CEO
  • Fair inclusion of non-executive directors on management boards
  • Audit committee
  • Risk management committee
  • Remuneration committee
  • Internal Audit among others.

Reflecting on the preamble above, you are required to:

Critically reflect on Fairchild, R. Gwilliam D. and Marnet, O. (2019). Audit Within the Corporate Governance Paradigm: A Cornerstone Built on Shifting Sand? British Journal of Management, Vol. 30, 90105, (See paper attached) and attempt the questions below.

  1. Based on the paper identify Four (4) corporate governance weaknesses from each of the following firms.

i) WorldCom ii) Xerox

  1. Hollinger
  2. Tyco 8 marks

  1. Adduce respective recommendations to address each weakness identified, to ensure compliance with corporate governance principles.

8 marks

  1. Based on the paper and the corporate governance principles set out in the preamble above, identify and explain the following:

  1. Four (4) actions that the board chairmen of each of the four firms should have taken in order to meet corporate governance requirements for their firms.
    1. marks
  2. Four (4) actions that the chief executive officers of each of the four firms should have taken in order to meet corporate governance requirements for their firms.
    1. marks iii. Four (4) actions that the non-executive directors on the management boards of each of the four firms should have taken in order to meet corporate governance requirements for the firms.

4 marks

  1. Six (6) actions that the audit committee boards of each of the four firms should have taken in order to meet corporate governance requirements for the firms.

6 marks

  1. Three (3) actions that the risk management committee of each of the four firms should have taken in order to meet corporate governance requirements for the firms.
    1. marks
  2. Two (2) actions that the remuneration committee of each of the four firms should have taken in order to meet corporate governance requirements for the firms. 2 marks vii. Four (4) actions that the internal auditors of each of the four firms should have taken in order to meet corporate governance requirements for the firms.
    1. marks

d) Reflecting on Fairchild, Gwilliam and Marnet (2019), and applying all your research principles in auditing, particularly corporate governance, answer the following:

  1. Identify the research problem of the paper and state it as clearly and concisely as possible. Note: As much as possible support your answer with in-text citations and references

5 marks

  1. Identify 3 main findings of the paper and briefly comment on each.
    1. marks
  2. Identify 3 main contributions of the paper and briefly comment on each.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Mindful Brand Auditing The New Way To Explore Brand Value

Authors: Kurt Gassner

1st Edition

3987939176, 978-3987939174

More Books

Students also viewed these Accounting questions