Shared Flashcard Set


GSRM - Governance
GSRM - Governance

Additional Accounting Flashcards




Role of the board
The general role of the BOD is to govern the company. They are resposible to identify the risks faced by the co. and implement systems to manage these risks. They have oversight role of mgmt and develop the goals of the company.
Written mandate of the board should include:
1-Top down of ethics and integrity
2-adopt a strategic planning process and approve plan on annual basis. The plan should include risks and opportunities
3-identification of principle risks and implementing appropriate systems to manage the risks
4-success planning, including appointing, developing and monitoring senior mgmt
5-adopt a communication policy
6- adopt a formal internal control and mgmt information system structure
7-co's approach to governance and principles and guidlines of the entity
8- measures for receiving feedback from stakeholders in order to continually improve
9- expectations and responsibilites of directors, including basic duties regarding attendance at baord meetings
Implications of lack of independence or oversight per mandate:

1- lack corporate culture and common direction

2- oversight of internal controls leading to weak control framework. This would provide not only for an unorganized co, but give opportunity for fraud in financial reporting and missapropriation of assets.

3-results in a co without a common vision and mission which management and employees unable to carry out the goals of the company which lead to poor direction and utimatley poor results

4- financial mgmt and external audit - leads to an increased risk for the aduitors which would result in more scruitiny of financial reporting process and management assertions

recommendation to improve board:
1-board should be independent of managment
2-implementaing a meeting chair for the board meetings and agreeing to an approach for cummunication
3-the chair shold be in best cases an idependent director, this person should be elected
4-develope a set agenda for items to be discussed which could include the following itmes: presentation of FS, significant new contracts, significant transactions, projects, staff changes, internal control systems, code of ethics and concerns, feedback from stakeholder
-develop a code of business conduct and ethics
-develop written and detailed documetns explicityly defining position descriptions, and board reponsibilites
-implement committees to oversee specific concerns (HS, audit, compensation, regulations and compliance)
Role of a committee
1-significant contribution in that they allow focus of board committe members on a single aspect of the boards mandate
Role and benefits of an audit committe:

-must have a written chater that sets out its mandate and responsibilites -

-        Ensure oversight and monitoring of mgmt. execution of financial reporting and disclosure

-        Oversee internal audit function and communicate results to management

-        Ensure appropriate choice of accounting policies and principles

-        Assist with hiring external auditors

-        Ensure more effective and accountable audit including follow up on findings and communicate with external auditors providing them with internal control frameworks and updates


-should consisite of independnet memebers
-minimum 3 members
-every memeber must be a director of the company
-every member must be financially literate
Strategic planning
1- plan for growth, maintain stability, manage risk, address inefficiencies, improve financial results
2- consists of mission, vision, values, goals, and strategies
3- strategic plan is managments responsibility
4-board approves strategic plan
5-understand both short and long term goals of org.
6-linking operations, capital, and resources to these goals
7-formally align board, company, and mgmt with same vision
8-provide measurable results.
Auditor communication with those charged with governance:

CAS 260 oulines the required communication with those charged with governance include:

1) auditors must communicate internal control deficiencies with mgmt and then those charged with governance

2) mgmt should discuss planning of audit work with auditors before start of audit

3) client and auditor responsibilites should be communicated

4)auditor independence should be addressed

5)ongoing discussion during the audit

6)closing discussion  & audit committee meeting

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