...Disclosure and transparency According to McGee (2009), the corporate governance framework should ensure timely and accurate disclosure is made of all material matters regarding the corporation, including the financial situation, performance, ownership and governance of the company. According to IOSCO (2010), disclosure and transparency are critical elements of a robust corporate governance framework as they provide the basis for informed decision-making by stakeholders. High quality disclosure and transparency helps the public understand the company’s activities, policies and performance with regard to environmental and ethical standards as well as the relationship of the company with the stakeholders. The Global Financial Crisis has demonstrated how poor quality disclosure and lack of transparency can mask excessive risk-taking and leveraging by global financial institutions. Hence, high quality disclosure and transparency not only serves to protect investors but helps regulators in maintaining market confidence and systemic stability. The strengthening of disclosures and transparency involves actions by a range of market participants as it covers processes from verification, the determination of information for the publication and communication. Quantitative and qualitative corporate information is then disseminated through various periodic reports such as the annual and quarterly reports, other disclosures and through various media or other stakeholder engagement sessions...
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...BAC4664 – Internal AuditingSection B01DTrimester 3, 2014/2015 | Internal Auditor and Whistleblowing Policies | Group Assignment | | Prepared by:Gabriella Rena Vanessa Darmadji 1121116458Nur Aida Binti Mohd Jasmin 1121118345 | | | Multimedia University Cyberjaya 2015 | INTRODUCTION Fraud negatively impacts organizations in many ways including financial, reputation, psychological and social implications. According to various surveys, monetary losses from fraud are significant. Thus, the organization has to establish an effective fraud management program that also covers the organization response to the whistleblower in the company. It is clear that corporate have major responsibility in their response of complaints regarding accounting, internal accounting control or audit matters where they have to establish audit procedure for the receipt, retention and treatment of complaints. Moreover, the organization has to build appropriate structure of line of reporting for the internal audit to support the effective fraud management program. The report discuss in deep on the Sarbanes Oxley Act 2002 in relation with bursa listing requirement. Furthermore, the whistleblowing also become the main issues on this report. The thorough discussion about what whistleblowing is and the key characteristics to support good whistleblower hotline also is conferred. REPORT Summary and compare the requirements of section 301.4 of the Sarbanes Oxley Act 2002 and compare those...
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...True False | 2. | Accrual accounting attempts to measure revenues and expenses that occurred during accounting periods so they equal net operating cash flow. True False | 3. | The FASB is currently the public-sector organization responsible for setting accounting standards in the United States. True False | 4. | The FASB's due process invites various interested parties to indicate their opinions about whether financial accounting standards should be changed. True False | 5. | Accounting for stock-based compensation is an area in which the FASB has received little political interference. True False | 6. | The Public Reform and Investor Protection Act of 2002 (Sarbanes-Oxley) changed the entity responsible for setting auditing standards in the United States. True False | 7. | A rules-based approach to standard setting stresses professional judgment as opposed to following a list of rules. True False | 8. | Under federal securities laws, the SEC has the authority to set accounting standards in the United States. True False | 9. | The primary responsibility for properly applying GAAP when communicating with investors and creditors through financial statements lies with a firm's auditors. True False | 10. | Auditors play an important role in the resource allocation process by adding credibility to financial statements. True False | 11. | The purpose of the conceptual...
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...complements each other in strategic business decision-making process and enhance individual economic planning. Accounting identifies measures and communicates economic information about an entity for the purpose of making decision and informed judgment (Marshall, et al., 2003). Users of accounting information include investors, stakeholders and other interested member of the public. The art and science of money management including sourcing for investment capital as well as banking and asset management of an entity throughout its entire life cycle is called finance. Accounting deals with the entry of transaction and preparation of financial data while finance is primarily involved in analyzing, interpreting and evaluation of financial data to guide in making informed business decisions. Sound economic management and prudent use of available resources is directly an offshoot of good understanding of fundamental accounting principles and appropriate entry of business transactions in accordance with established professional ethics. In today’s dynamic world and increasingly competitive environment, accurate reporting and sound accounting practices, as recommended by GAAP are critical to sustainable growth, increased investors’ confidence and break-through performance. Application of basic accounting principles and sound financial practices are required...
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...provides financial information about a domestic entity to domestic users of that information. International accounting is distinctive in that the entity being reported on is either a multinational company with operations and transactions that transcend national boundaries or involves an entity with reporting obligations to readers who are located outside the reporting entity’s country of domicile. 2. Advantage: Some might argue that measurement, disclosure, and external auditing are three distinct (although related) processes, involving different members of the company. For example, corporate attorneys often are involved in disclosure issues, but seldom intervene in measurement issues. The Board of Directors works with the external auditors but not necessarily with the comptroller s office. Thus, discussion of accounting requirements and voluntary accounting choices in different jurisdictions is simplified by focusing on the three components of accounting. Disadvantage: measurement, disclosure and auditing are interdependent, and should not be viewed in isolation of one another. A company choosing to disclose as little as possible, for example, may use accounting measurement approaches that reduce the information content of financial statements, and select an external auditor who will be relatively lenient in enforcing accounting requirements. One alternative classification might include accounting (measurement and disclosure), and auditing. A second classification might include...
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...Egypt 's Accounting and Auditing Standards and the adoption of International Accounting Standards Brief history of accounting in Egypt Historically, Egyptian accounting was not capital-market oriented but rather followed the principles of macro-accounting with huge government intervention aimed at tightly controlling the economy -- and was closely connected with accounting for tax purposes. Economic liberalisation began in the mid 1990s – with aspirations aimed at creating a guided free market economy – this involved the reactivation of the stock exchange market in 1995 and a privatisation programme. The transition posed challenges for the Government, private sector institutions and accountants alike. Increasing the role of the private sector required changes to and reforms of accounting systems in order to support better decision-making, attract investments, stimulate economic development, and enhance foreign investors’ confidence in the market. Egyptian accounting and auditing standards (1997–2002) As part of the reform process, the Government of Egypt pursued a policy of harmonising (EAS- Egyptian Accounting Standards) with IAS, while ensuring that specific characteristics of the Egyptian operating environment were taken into account. As a result of Ministerial Decision No. 503, in October 1997 Egypt established the Permanent Committee for Accounting and Auditing Standards to issue EAS that were to be based on IAS, yet modified to suit the local arena. Although official...
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...services at a 25% discount from the law firm’s usual hourly rates. Legal services for domestic cases, bankruptcy, and drug and alcohol related matters are limited under the memberships. 2. Legal Plan Services is mandated to follow statement No. 168, the FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles concepts. The statement is effective for financial statements issued for interim and annual periods ending after September 15, 2009. The objective is to prepare all of their products following the same revenue and expense recognition rules (deferral of revenue and accrual recognition of expenses). An explanation of specific recognition rules follows. * ASC 605-10-05-1 “The Revenue Recognition Topic provides guidance for transaction-specific revenue recognition and certain matters related to revenue-generating activities that are not addressed specifically in other topics.” * ASC 605-28-25 “The Recognition Section provides guidance on the required criteria, timing, and location (within the financial statements) for recording a particular item in the financial statements. Disclosure is not recognition” 3. Legal Plan Services recognize various types of...
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...Going Concern issues in financial reporting: a guide for companies and directors Published in 2009 by: Australian Institute of Company Directors (AICD) Level 2 255 George Street Sydney NSW 2000 Telephone: (+61 2) 8248 6600 Facsimile: (+61 2) 8248 6633 www.companydirectors.com.au publications@companydirectors.com.au Auditing and Assurance Standards Board (AUASB) Level 7 600 Bourke Street Melbourne VIC 3000 Telephone: (+61 3) 8080 7400 Facsimile: (+61 3) 8080 7450 enquiries@auasb.gov.au www.auasb.gov.au © Australian Institute of Company Directors (AICD) © Auditing and Assurance Standards Board (AUASB) © Financial Reporting Council (UK) 2009. Portions of this publication have been adapted and reproduced from an Auditing Practices Board Bulletin: Going Concern Issues During the Current Economic Conditions (December 2008) with the kind permission of the Financial Reporting Council (UK). All rights reserved. For further information please visit www.frc.org.uk or telephone +44 (0)20 7492 2300. © Portions of this publication have been adapted and reproduced from a KPMG Flash Report: How Concerned Should Directors be with Going Concern? (February 2009) with the kind permission of KPMG. All rights reserved. Typeset by Endnote design Printed by Ligare Pty Ltd National Library of Australia Cataloguing-in-Publication entry Going Concern issues in financial reporting: a guide for companies and directors/AICD, AUASB ISBN 9781876604158 (pbk.). 9781876604172...
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...CHAPTER 1 THE CANADIAN FINANCIAL REPORTING ENVIRONMENT Multiple Choice—Conceptual Answer No. Description d 1. Accounting characteristics. a 2. Nature of financial accounting. c 3. Definition of financial accounting. a 4. Financial reporting entity. d 5. Efficient use of resources. d 6. Capital allocation process. c 7. Assessing management stewardship. c 8. Objectives of financial reporting. a 9. Role of AcSB. c 10. Body responsible for setting GAAP. b 11. Preparation of biased information. d 12. Parties instrumental in development of reporting standards. d 13. Stakeholders in the financial reporting environment.. a 14. “Due process”. d 15. Causes of subprime lending crisis. d 16. Management bias. b 17. Adoption of IFRS. c 18. Role of OSC. d 19. Definition of GAAP. b 20. Changing nature of the economy. d 21. Exercise of professional judgement. c 22. Major factors in the reporting environment. a 23. Impact of technology on financial reporting. b 24. Nature of the “Balanced Scorecard”. a 25. Responsibility for financial statements. d 26. GAAP for private enterprises. d 27. Reporting principles b 28. SOX. a 29 AcSB’s standard setting process Exercises Item Description E1-30 Objectives of financial reporting. E1-31 Role of securities commissions and stock exchanges. E1-32 User needs. E1-33 Sources of GAAP. E1-34 Standard Setting. E1-35 Challenges facing financial reporting. E1-36...
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...CHAPTER 1 THE CANADIAN FINANCIAL REPORTING ENVIRONMENT Multiple Choice—Conceptual Answer No. Description d 1. Accounting characteristics. a 2. Nature of financial accounting. c 3. Definition of financial accounting. a 4. Financial reporting entity. d 5. Efficient use of resources. d 6. Capital allocation process. c 7. Assessing management stewardship. c 8. Objectives of financial reporting. a 9. Role of AcSB. c 10. Body responsible for setting GAAP. b 11. Preparation of biased information. d 12. Parties instrumental in development of reporting standards. d 13. Stakeholders in the financial reporting environment.. a 14. “Due process”. d 15. Causes of subprime lending crisis. d 16. Management bias. b 17. Adoption of IFRS. c 18. Role of OSC. d 19. Definition of GAAP. b 20. Changing nature of the economy. d 21. Exercise of professional judgement. c 22. Major factors in the reporting environment. a 23. Impact of technology on financial reporting. b 24. Nature of the “Balanced Scorecard”. a 25. Responsibility for financial statements. d 26. GAAP for private enterprises. d 27. Reporting principles b 28. SOX. a 29 AcSB’s standard setting process Exercises Item Description E1-30 Objectives of financial reporting. E1-31 Role of securities commissions and stock exchanges. E1-32 User needs. E1-33 Sources of GAAP. E1-34 Standard Setting. E1-35 Challenges facing financial reporting. E1-36...
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...Solution Manual to accompany Accounting: Business Reporting for Decision Making 4e Jacqueline Birt, Keryn Chalmers, Suzanne Byrne, Albie Brooks & Judy Oliver Prepared by Jacqueline Birt John Wiley & Sons Australia, Ltd 2012 Chapter 1: Introduction to accounting Comprehension Questions 1.1 What is a business transaction and how does it relate to the accounting process? Illustrate the concept of a business transaction with five examples relating to a mobile phone distributor. A business transaction can be defined as external exchanges of resources between the entity and another entity or individual that affects the assets, liabilities and owners’ equity items in an entity. The accounting process is the identifying, measuring and communicating of economic information about an entity to a variety of users for decision-making purposes. The first component of the process is the identification of business transactions which are then measured and communicated to the different users of financial reports. Business transactions for a mobile phone distributor include the following: 1. The contribution of capital by the owner to commence the business. This transaction would increase cash (asset) and increase capital (equity). 2. The purchase of inventory (mobile phones) on credit. This transaction would increase inventory (asset) and increase creditor (liability). 3. The payment of office rent. This transaction would decrease cash (asset) and decrease...
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... * Financial accounting has value because the information it produces is used in a variety of ways. * People study accounting to learn how to use information effectively and do their jobs better. * Accounting information is produced by a large set of people, activities and computers. To be effective users of the information, people need to know how and why the information is prepared. * An accountant’s expertise is all about how and why. Financial Accounting * Accounting is a process of identifying, measuring and communicating economic information to allow informed decisions by the users of that information. There are two types of accounting systems: * Financial accounting systems – * This is where periodic financial statements are provided to external decision-makers (such as investors, creditors and customers, such as government, small and large businesses). * Financial accounting measures an enterprise’s performance over time and its position at a point in time. * Financial performance means generating new resources from day-to-day operations over a period of time. * Financial position is the enterprise’s set of financial resources and obligations at a point in time. * Financial statements are reports which describe financial performance and position and help to measure whether the enterprise is in a good position. * Management accounting systems – * This is a branch of accounting...
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... Increasing globalization and investor appetite for diversification offer a unique opportunity to companies looking to tap a new investor base, expand awareness, or raise capital. By creating a depositary receipts program, you gain the flexibility and access you need to achieve your company’s strategic goals. Depositary receipts hold special appeal for investors because they make investing in a company beyond the investor’s home borders easy and convenient. That ease fuels investor appetite, which in turn has driven explosive growth in the depositary receipt market. Companies from more than 80 countries have gained new investors outside their home markets. More than 2,100 issuers have issued depositary receipts. 500 depositary receipt programs are listed on US exchanges, providing the issuing company with important access to new capital. Depositary receipts account for 16% of the entire US equity market.* Since JPMorgan established the first depositary receipt program in 1927, depositary receipts have gained widespread popularity as both an investment vehicle and investment option. In particular, investors appreciate how depositary receipts mitigate the concerns that normally accompany cross-border investments, such as expensive and complicated transactions and settlement. *For a comprehensive overview of the entire depositary...
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...Australian Accounting Standards Board (AASB) accounting standards. • Outcome 3: A comprehensive understanding of the advanced issues in accounting for assets, liabilities and owner’s equity. • Outcome 4: The ability to account for income taxes. • Outcome 5: The ability to account for leases. Research School of Accounting and Business Information Systems 3 1 Lecture outcomes • Outcome 6: The ability to account for intangible assets. • Outcome 7: An understanding of the accounting requirements for a corporate group and familiarity with the theory underlying the methods used to account for intercompany investments. • Outcome 8: The ability to prepare consolidated accounts for a corporate group. • Outcome 9: An understanding of the basic principles of accounting for investments in associates. Research School of Accounting and Business Information Systems 4 Course administration • Students taking this course are expected to commit at least 10 hours a week to completing the work. • This...
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...Question 1 1. The principle or rule known as the maintenance of share capital is based on the need to protect shareholders and creditors. Share capital is the contribution made by shareholders by subscribing shares of the company. A company’s creditors can only look to the share capital for the payment in the event of a winding up. To protect creditors, a general rule known as the rule in Trevor v Whitworth was developed to prohibit a company from reducing its share capital because a reduction in capital would prejudice the rights of creditors. Moreover, the reduction would in effect diminish the pool of funds available to the company to pay its creditors. The rule in Trevor v Whitworth has been incorporated into Ch 2J of the Corporations Act 2001.Certain provisions of the Corporations Law 2001 seek to enforce the rule Trevor v Whitworth. There are a few Sections of the Corporations Act 2001 that enforce the maintenance of capital principle (or the rule of Trevor v Whitworth). Section 254T of the Corporations Act 2001 stated that a dividend may only be paid from profits. The Section 254T of the Corporations Act 2001 states that a company must not pay a dividend unless: the company’s assets exceed its liabilities before the dividend is declared and the excess is sufficient for the payment of the dividend, and; the payment of the dividend is fair and reasonable to the company’s shareholders as a whole and; the payment of the dividend does not materially prejudice the company’s...
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