Assignment Answers:Corporate Governance Policymakers 7SSMM609

Assignment Answers:Corporate Governance Policymakers 7SSMM609

Accounting, Organization & Society 1
Accounting, Organization & Society
Student Name
Institution Affiliation
Due Date
Ques …

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Accounting, Organization & Society 1
Accounting, Organization & Society
Student Name
Institution Affiliation
Due Date
Question 6
Introduction
Introduction
Corporate governance policymakers are capable of begging the question in both senses: they
presuppose, with scant evidence, that audit committees are an effective governance tool, and the
existence of audit committees permits some of the difficulties associated with regulating
corporate accountability to be sidestepped. During the course of their tasks, the members of the
audit committee get professional guidance emphasizing the necessity of questioning. An
examination of the working procedures of audit committees may give light on the assumptions
that appear to underpin their support. There are discussions about the s ignificance and limitations
of questioning. In addition, the research suggests that inquiry may serve a symbolic function
rather than a functional one in this setting.
A company’s audit committee’s primary responsibility is to monitor the financial reporti ng,
auditing, internal control, and regulatory compliance processes.
As a result of recent professional and regulatory announcements, the audit committee could
anticipate analyzing significant accounting and reporting concerns. To establish if reports are
complete and reliable, it is crucial to understand how management generates internal interim
financial data.
The committee meets with management and external auditors to examine audit results, which
may include any information required to be submitted to the committee by generally accepted
auditing standards. The committee oversees financial reporting, IT security, and operational
problems.
Despite the abundance of research on group dynamics, little is known about how committees’
function. The organization in which it functions establishes the structure, methods, and
documents (such as agendas and minutes) of an official committee. Typically, these norms are
supplemented by rules of conduct unique to the organization’s environment and culture.
Although meet ings or portions of meetings may be accessible to the public, many committees
prefer to operate in private.
The audit committee has authority over financial reporting, auditing, and internal financial
control as a board subcommittee. Shareholders are not i mmediately informed of the company’s
activities. The board of directors receives reports and recommendations that serve as a kind of
assurance that the oversight activities are being carried out appropriately. Its work can be
described using terms such as “monitor,” “review,” “consider,” and “consideration.”
There are three ways that questioning can help a group reach consensus:
Over the course of a decade, the cited manuals may have undergone minor modifications.
According to this article, the major objec tive of questioning is to obtain information that will
assist audit committee members in reaching judgements about the quality of reporting in order to
recommend to the main board that they approve the annual financial statements. Priority number
one is en suring that external auditors have had the opportunity to examine and comment on
company control systems and that their opinions have been taken into account. The goal of the
audit committee is a detailed review on behalf of the main board, both to free up the main board’s
time and to maximize the use of the specific experience of non -executive directors.
In conclusion, an audit committee member must possess common sense, vast experience,
independence, sound judgment, and an understanding of the committee’s responsibilities. To
avoid losing sight of the fundamentals of financial reporting, the committee should not place an
excessive amount of emphasis on financial literacy. However, they can present a significant
challenge to individuals who should be conver sant with the financial reporting process. It is
likely that the idea that certain directors will function as a buffer between corporate and
shareholder interests is unduly optimistic. According to this idea, the ability for boards to
duplicate themselves in their own image through self -selection and socialization into a dominant
boardroom culture is underestimated.
Reference
Khudhair, D., Al -Zubaidi, F., & Raji, A. (2019). The effect of board characteristics and audit
committee characteristics on audit q uality. Management Science Letters , 9(2), 271 -282.
Zalata, A. M., & Abdelfattah, T. (2021). Non -executive female directors and earnings
management using classification shifting. Journal of Business Research , 134 , 301 -315.

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