Topic B1 internal audit and corporate governance.docx

Topic B1 internal audit and corporate governance.docx

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TopicB1internalauditandcorporategovernance

　　该专题部分内容需要我们在理解的基础上加以记忆；部分内容仅需了解即可。

　　该专题内容将属于经常进行更新的部分,即与时俱进。

　　虽比较枯燥,但是考试时经常涉及的领域,为了通过,必须静下心来认真学习。

　　1.Themeaningofcorporategovernance

　　Ccorporategovernanceisthesystembywhichcompaniesaredirectedandcontrolledthemainissuesinthecorporategovernancedebateinclude;

　　·themembershipandroleoftheboardofdirectors

　　·howdirectors’remunerationisdecidedanddisclosed

　　·howbothinternalauditandexternalauditinterfacewiththeexecutivedirectors

　　Forseveralyearsmuchofthediscussionanddebateinthisareahasbeendrivenbyscandalsandallegeddishonestyandmismanagement.Severalrecentdevelopments,mostnotablytheSarbanes-OxleyActintheUSfollowedonfromtheEnronandWorldComcollapsesintheUS.

　　Corporategovernanceisakeyareaforauditorstounderstandsincethisnowprovidesimpetustotheroleofinternalandexternalaudit.Failuretomeetcorporategovernancerequirementscanresultinamajorrisktoacompany’sreputation.Evenwherecompaniesarenotgovernedbytherequirements,theyaimtomeettherequirementstoensurethattheirreputationdoesnotsuffer.

　　2.Backgroundtothedevelopmentofcorporategovernance

　　Issuesofcorporategovernancevaryfromcountrytocountrybutallareconcernedwiththeproperrunningofcompaniesintheinterestofshareholders,lendersandcreditors,andthecommunityatlarge.Toomanycompaniesinthepasthavesufferedfromserousandfraudulentmismanagementbytoopowerfuldirectorswhoactintheirpersonalinterestsinsteadoftheinterestsofthecompany.

　　3.Boardsofdirectors

　　IncontinentalEurope,the‘two-tier’boardiscommon.Theexecutiveboardwhichtakestheday-to-daydecisionsintherunningofthecompanyisoverseenbyasupervisoryboardmadeupofrepresentativesofemployees,investorsandothers.MajordecisionsarereferredtothesupervisoryboardisIntendedtoactasacheckontheactionsoftheexecutiveboard.

　　Theprincipaldisadvantageofthisstructureisthatitcanbecumbersomeanddifficulttoadminister.Thesupervisoryboardisalsotoooftenill-informedorinformedofsignificantdecisionstoolate,oraftertheyhavebeenimplemented.Ithasbeensuggestedthatinvestorsandsomeoftheotherstakeholdersrepresentedarereluctanttodiscussmanykeyissuesinthepresenceofemployees’representedarereluctanttodiscussmanykeyissuesinthepresenceofemployees’representatives.

　　IntheUK,theUSAandotherEnglish-speakingcountries,supervisoryboardsareuncommon.Companiestypicallyhaveonesingleboardofdirectors.Overrecentyearstheactionsofexecutivedirectorshavebeencheckedbytheintroductionofnon-executivedirectors,auditcommittees,anddirectors’remunerationcommittees.SuchcommitteeshaveexistedformanyyearsintheUSA.TheyareamorerecentintroductionintheUKwheretheworkdonebytheCadburyCommitteeonCorporateGovernancedidmuchtoadvancetheirPosition.TheCommittee’sworkfollowedonfromthedeclineinpublicconfidenceincorporategovernanceafterseveralspectacularcorporatecollapses（e.g.Maxwell,PollyPeck）.

　　Non-executivedirectorsarenormallyemployedonapart-timebasisandtheywouldnotnormallytakepartintheroutineexecutivemanagementofthecompany.Theywouldbeexpectedtoparticipateinboardmeetingsandwouldbebriefedandpreparedaccordingly.Theyhavetowmainroles.Traditionally,non-executivesprovidedexperienceandbusinesscontacts,therebystrengtheningtheboardasawhole.Theystilldoso,buttheirroleisevolvingintoprovidinganoversightoftheexecutiveboard.Theyactalmostasacorporate’conscience’.Arguablythenon-executiveshaveasmuchtolose,ifnotmore,thantheirexecutivecolleagues,theywillloseagreatdealofcredibilityiftheycondoneanymisbehaviouronthepartofthecompany.Theexpectationisthatthenon-executiveswilleithercurbanyproposalsthatareunacceptableortheywillresignanddrawattentiontothem.

　　Thenon-executiveswillalsoparticipateincommitteesthatreporttothemainboard.Auditcommittees,whichshouldbestaffedbyindependentandknowledgeablenon-executivedirectors,areintendedtoliaisewithauditorsandshareholders.

　　Remunerationcommitteesareintendedtorecommendpayawardstoseniorexecutives.AlmostalllistedcompaniesintheUKandtheUSnowhavebothsuchcommitteesastheyareeffectivelyarequirementofthestockexchanges.

　　Theprincipaldisadvantageoftheuseofsuchcommitteesandnon-executivedirectorsgenerallyisthat,likesupervisoryboards,theyaretooofteninsufficientlywellinformedortechnicallycompetent,Theyarealsosubjecttotheaccusationthattheyarestaffedbyan‘old-boy’networkwhofailtodetectandreportsignificantproblemsandwhoapprovepayrisesthatarenotjustified.ThiscontinuestomarpublicconfidenceandtheEnroncollapseintheUSindicatesthatauditcommittees,aspresentlyconstituted,cannotalwaysbereliedupontomonitortheexecutivedirectors.

　　4.Chairman/ChiefExecutiveOfficer

　　Itisoftenstatedthattoomuchpowershouldnotrestinthehandsofoneperson,andthattherolesofchairmanandchiefexecutiveofficershouldnotbeperformedbythesameperson,Howeveritshouldbenotedthatmanycorporatecollapseshaveinvolvedcompanieswherethereweretowdifferentindividualsoccupyingthesepositions,aswellaswheretherewassubstantialnon-executiverepresentationintheboard.

　　5.OECDPrinciplesofCorporateGovernance

　　ThePrinciplesareintendedtoassistMemberandnon-Membergovernmentsintheireffortstoevaluateandimprovethelegal,institutionalandregulatoryframeworkforcorporategovernanceintheircountriesandtoprovideguidanceandsuggestionsforstockexchanges,investors,corporations,andotherpartiesthathavearoleintheprocessofdevelopinggoodcorporategovernance.ThePrincipleswerefirstpublishedin1999andwererevisedin2004.Theyfocusonpubliclytradedcompanies.However,totheextenttheyaredeemedapplicable,theymightalsobeausefultooltoimprovecorporategovernanceinnon-tradedcompanies,forexample,privatelyheldandstate-ownedenterprises.

　　TherearesixPrinciples,eachbackedupbyanumberofsub-principles.ThePrinciplesareasfollows:

　　ⅠEnsuringthebasisforaneffectivecorporategovernanceframework

　　Thecorporategovernanceframeworkshouldpromotetransparentandefficientmarkets,beconsistentwiththeruleoflawandclearlyarticulatethedivisionofresponsibilitiesamongdifferentsupervisory,regulatoryandenforcementauthorities.

　　ⅡTherightsofshareholdersandkeyownershipfunctions

　　Thecorporategovernanceframeworkshouldprotectandfacilitatetheexerciseofshareholders’right.

　　ⅢTheequitabletreatmentofshareholders

　　Thecorporategovernanceframeworkshouldensuretheequitabletreatmentofallshareholders,includingminorityandforeignshareholders.Allshareholdersshouldhavetheopportunitytoobtaineffectiveredressforviolationoftheirrights.

　　ⅣTheroleofstakeholdersincorporategovernance

　　Thecorporategovernanceframeworkshouldrecognisetherightsofstakeholdersestablishedbylaworthroughmutualagreementsandencourageactiveco-operationbetweencorporationsandstakeholdersincreatingwealth,jobs,andthesustainabilityoffinanciallysoundenterprises.

　　ⅤDisclosureandtransparency

　　Thecorporategovernanceframeworkshouldensurethattimelyandaccuratediscloserismadeonallmaterialmattersregardingthecorporation,includingthefinancialsituation,performance,ownershipandgovernanceofthecompany.

　　ⅥTheresponsibilitiesoftheboard

　　Thecorporategovernanceframeworkshouldensurethestrategicguidanceofthecompany,theeffectivemonitoringofmanagementbytheboard,andtheboard’saccountabilitytothecompanyandtheshareholders.

　　6.TheOECDPrinciplesandtheirrelationtoaudit

　　Externalauditorismentionedinsub-principlesVCandVD.Thesestatethat:

　　VCAnannualauditshouldbeconductedbyanindependent,competentandqualifiedauditorinordertoprovideanexternalandobjectiveassurancetotheboardandshareholdersthatthefinancialstatementsfairlyrepresentthefinancialpositionandperformanceofthecompanyinallmaterialrespects.

　　VDExternalauditorsshouldbeaccountabletotheshareholdersandoweadutytothecompanytoexercisedueprofessionalcareintheconductoftheaudit.

　　Thekeyresponsibilitiesoftheboardaredescribedinsub-principleVIDasfollows:

　　·reviewingandguidingcorporatestrategy,majorplansofaction,riskpolicy,annualbudgetsandbusinessplans;settingperformanceobjectives;monitoringimplementationandcorporateperformance,andoverseeingmajorcapitalexpenditures,acquisitionsanddivestitures

　　·monitoringtheeffectivenessofthecompany’sgovernancepracticesandmakingchangesasneeded

　　·selecting,compensating,monitoringand,whennecessary,replacingkeyexecutivesandoverseeingsuccessionplanning

　　·aligningkeyexecutiveandboardremunerationwiththelongerterminterestsofthecompanyanditsshareholdersensuringaformalandtransparentboardnominationandelectionprocess

　　·monitoringandmanagingpotentialconflictsofinterestofmanagement,boardmembersandshareholders,includingmisuseofcorporateassetsandabuseinrelatedpartytransactions

　　·ensuringtheintegrityofthecorporation’saccountingandfinancialreportingsystems,includingtheindependentaudit,andthatappropriatesystemsofcontrolareinplace,inparticular,systemsforriskmanagement,financialandoperationalcontrol,andcompliancewiththelawandrelevantstan