Author Topic

Allan (2006) Comments on HIH, and Arthur Andersen

Becker (1982) Professional judgment argument

Blanthorne et al. (2005) Technical, Soft Skills: Career Perspectives

Carnegie and Napier (2010) Ideals of professionalism &deprofessionalisation

Chambers (1973) Creative accounting

IFAC PAIB Committee (2008) understanding role of accounting in SME is imp.

Lee (1995)

Rob + Coopeer, 1990

Self-interest and public interest of accountants may

be integrated

Schon (1983) diff. btw prof judgment and tech judgment

Sikk (2009) poor audit quality

West (2003) portrayals of prof.

West (2003) „Regulatory fiat‟: importance of professionals

West+ Larson ( 1977) driving motivation of profession may not be altrusim

Wilensky (1964) sevice ideal

Will mott (1990) sevice ideal

Albrecht (1992) integrity

Bazerman et al. (2002) Loewenstein,

Moore Breach of public interest due to unconscious bias

Bedard (2001), Parker (1994), Canning &

O‟Dwyer (2003) professional; code of ethics serve a dual purpose

Biddle (2006) Moral agency -Value Creation

Brown (2006) Prof competence and due care

Cottel, Perlin (1990) independence

Dellaportas et al. (2005) Normative theories: “Should”

Dellaportas et al. (2005) Limitations of principles-based approach

Dent (2009) Organizational culture and significant others

Dobson (2005) Moral agency

Doucet and Ruland (1994)

3 virtues of particular relevance for accountants to

fulfill their responsibilities

Hellier & Bebbington (2004) Limitations of principles-based approach

Herbert Simon, Guy (1990) Ethical decision-making models

Immanuel Kant Deontological theories (non-consequential)

Jenning (1999)

preparation and reporting of info., earning

management

Kahneman, Tversky (1972)

Indiviual, Cognitive (nhận thức) development,

subjective probability

Leung & Cooper (2005) ethics in accounting - real life scenarios

Jeremy Bentham & John Stuart Mill -

John Rawls (1971) Justice theory

Kohlberg (1981) cognitive development

Kohlberg (1981)

Theory of cognitive moral reasoning and

development (3 levels, 6 stages)

Mele' (2005) Virtue ethics (what people should be)

Mintz (1992) Prof. ethics - how one should behave

Raymond Baumhart (1970s; 2003) survey "what does ethics mean to you"

Rest (1979) Integrity

Schein (2004) Relationship between ethical behavior and culture

Windal (1990) Integrity

Willmott (1990) & Sikka (1989) „Public Interest‟ - ethics in practice

Teleological theories

-

Right theory

Level 1 – Pre-conventional (self-interest)

Level 3 – Post-conventional (society)

Level of moral reasoning in accounting

Ethics risk-management framework

Social factors: Laws, regulations and culture

The AICPA decision tree

Level 2 – Conventional (position & role)

Abbott (1988) Comments on Larson‟s theory & power literature

Albrecht and Sack (2000) Accounting Stereotypes: Scorekeepers

American Accounting Association (AAA) Accounting Definition

Annual Report of FRC (2010) Requirements on independence of auditors

APESB (2010) Professional Ethics

Beard (1994) Accounting Stereotypes

Bertrand Russell (1955) Situational Ethics

Biddle (2006) Value Creation

Brewster (2003) Loss of trust in the accounting profession

Buckley (1978) Public Interest

Carey (1969), Buckley & Buckley (1974) Key attributes of a profession

Carnegie (2009) Governance

Carnegie and Napier (1996) Accounting: Social Intermediary

Chambers (1973) Lack of action to put its affair in order

Coate et al. (2003) Accounting Stereotypes

CPA Australia Accounting Definition & “Service Ideal”

Dimnik and Felton (2006) Accounting Stereotypes (5)

Friedman and Lyne (2001) Accounting Stereotypes (Bean counter)

Green (1991) & Clarke (2003) Many accounting issues from 80s is unsolved

Greenwood (1957) Key attributes of a profession

IFAC (2003) Rebuilding public confidence on Financial Report

IFAC (2004) „Enterprise Governance‟

IFAC (2005) Professional Accountants in Business

Larson (1977) Professionalisation

Lonergan (2009, p.24) Accounting: Social Impacts

Macquarie Dictionary Accounting Definition

Macquarie Dictionary Accounting Definition

Miller‟s (1994) Accounting: Wider Social Impacts

OECD (2004) Governance

Oxford Dictionary „Govern‟ and „Governance‟ Definition

Robson and Cooper (1990) & Willmott Relationship between accounting & social

Smith and Briggs (1999) Accounting Stereotypes observation

The Australian & Murdoch (2010) #N/A

Aristotle -

Aristotle Virtue ethics

Collins (2003) and Pierce & Sweeny (2004) Stress in the workplace

Davenport & Dellaportas (2009) Conflict of interest associated with confidentiality

Dellaportas et al. (2007) Organizational culture

Dellportas (2005) Same as above

Herbert Simon, Guy (1990) Ethical decision-making models

Langenderfer and Rockness (1990) 7 steps ethical decision-making adopted by AAA

Mathison (1988) Philosophical model of ethical decision-making

Ponemon and Gabhart (1993) Circumstances pursue the wrong course of action

Schein (2004) Schein‟s six primary mechanisms

Sim (2000), Sim and Brinkmann (2002,

2003) and Dellaportas at el. (2007)

Examine the relationship between leadership and

culture in Schein‟s mechanisms

Tuller (2000) Accounting work environment

Page Narrative

1.6 mức phạt cho các cá nhân liên quan

1.13 single most important attribute, dif. Btw prof. and non prof.

1.37

techical imp for first promotion; interpersonal, leadership and

communication for parnership

1.8 = 4E, education, ethics, expertise, entrepreneuship

1.32

whatif to follow the "optional accounting rules" - drift (buông

trôi, độ lệch)

1.26 vital for success for enterprise and economy

1.7

1.13

prof. people have awareness of uncertainty, complexity,

instability, uniqueness & value conflict

1.32 question raised abt quality of audit

1.7

images of altruism, ethical service and self-regulation were

supplanted by portrayal of prof.

1.14

without judgment, accountant = occupational grp. Depends on

the imposition of 'regulatory fiat' = sắc lệnh

1.7 monopolies; self interest; enlightened self interest

1.10 pivot around the moral

1.10

qualifying + reporting basic fact of economics

decision making

allocation of resources

2.26

integrity is not enough, need conviction as well; not the one

blow the wind, two-faced, hypocritical, or not stand for

anything.

2.24

arise from an attachment to the client and a familyartiy with

those affected by the decisions

2.67 self-interest and public interest

2.21 knowing where the value is created, where it is lost are keys

2.27 lap BCTC, answer 98% early, 2% accuracy from the detail

2.46

2.11

provide a principle to establish how we ought to behave,

irrespective of current social norms and practise

2.33

Principles are also subject to a broad range of interpretions

due to vague and generalised wording.

2.65 an ethical culture may also enhance a company's productivity

2.22

2.21 expertise, courage and integrity

2.33

awareness of issues, use of judgment, application of common

sense

no rationally searching for best alternative; „Satisficing‟:

Satisfactory, less than optimal; chi can good enough, k can

best outcome

2.18 intention to do the right thing is imp.

2.55

earning mngt ton tai lau doi, some no longer see it as an

ethical issue, but accepted it as a biz practice

2.64

a judgment of repreentativeness; luôn có potential bias, eg.

Framing - đóng khung suy nghĩ, nhận thức

2.9

accountant need 1- competence 2 - right prof decision under

pressure and other constraints

Utilitarianism

accountant need 1- competence 2 - right prof decision under

pressure and other constraints

2.19

qualified egatitarian theory, benefits and burdens should be

distributed equally, except when an unequal distribution would

work to everyone's advantage

2.64

2.20

moral character is seen to be more imp. Than the right action

ethical behavior is the result of values such as integrity + good

character

2.8

prof ethics is a system or a code of conduct based on moral

duties and obligations that include how one should behave

2.5

Thieu khai niem ve systematic process nên not convincing and

not consistent

2.26

people with low ego strength -> more vulnerable to situational

pressures and distraction --> less able to carry out 'highes

ideal'

2.65

significant contribution to the culture and ethical approach of an

org+

2.25

integrity is an element of character and is essential to the

maintenance of public trust

2.23

Will-theres no single meaning of public interest; and that the

term itself is "slippery, value-laden and vacous"

Sillka- pubic interest is "subject to consideration debate and

negotiation"

Egoism (Ethical

vs

psychological)

Distribute

justice

#N/A

#N/A

#N/A

#N/A

#N/A

#N/A

#N/A

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#N/A

#N/A

#N/A

#N/A

#N/A

#N/A

#N/A

#N/A

#N/A

#N/A

#N/A

#N/A

#N/A

#N/A

#N/A

#N/A

#N/A

#N/A

#N/A

#N/A

#N/A

#N/A

#N/A

#N/A

#N/A

NA Mod2

NA Mod2

NA Mod2

NA Mod2

NA Mod2

NA Mod2

NA Mod2

no rationally searching for best alternative; „Satisficing‟:

Satisfactory, less than optimal; chi can good enough, k can

best outcome

NA Mod2

NA Mod2

NA Mod2

NA Mod2

NA Mod2

NA Mod2

Ethics and Corporate Governance

Module 1: Accounting and Society

Part A: Interaction with Society /Accounting in Society

Recruiting the Best (Add value, Lifelong and Professiona capabilities)

Depiction of Accounting (Stereotype of Accounting Dimik&Felton)

Coate: +Prudence (Social skills), - Colourful Accountant(Downside of Service ideal)

Moral Agency (Ethical Approaches to achieve outcomes)

Technical Functions and Social Impact

1.- Understanding Accounting (Social practice: Professional capabilities + Service ideal)TSKE/SSKE

2.- Social Impact: Less Prescriptive more judgments) Lonegan: GFC

3.- Theoretycal Analysis of Social Impact

Body of Knowledge: Parkers & Millers

Macro Level ( Business & goverments - Power and control)

Micro Level (Manager & Employee - Motivation and Behaviour)

Capabilities Considerations (Sufficient capabilities=complex&difficult professional Judgements)

TSKE: General Accounting Activities

SSKE: Social Skills & Capabilities well developed

Both vital : Lifelong learning for both activities.

Accounting roles, Activities & Relationship

PAIB : Professional Accounting in Business

IFAC-PAIB, value adding, Value creation,.

Contemporary role/Main activities of a Professional Accountant.

1. Accountants employed in Large Business (Strategy development & implementation)

2. Public Practice: Accounting Firm Environment-Big 4, Large 7 second tier firms)

3. SME's ( very small SME's relying in SMP's practice. Large firms :few or one Accountant)

IFAC: SME'S focus on compliance, not being much value in performance(profitability)

PAIB: Accountans reponsible to generate value for the success of company.

Ethics ( Moral, Ethics, Business Ethics, Professional Ethics; APES 110, Guidelines &rules)

Accounting and Effective Governance

Accounting: OECD 2004, Social practice.

Corporate Governance: IFAC-Performance + Conformance

Part B: Accountants as a member of a profession.

Trust and Profession: Integrity, Autonomy, Professional Judgement

Atributte of a Profession: Autonomy and Service Ideal

A systematic Body of Theory and Knowledge

An Extensive Education Process

An Ideal Service to the Community

A High degree of Autonomy and Independence (Objectivity and integrity)

A code of Ethics for members (APES 110, AASB, AUASB, Corporate Law)

A Distintictive ethos or culture ( CPA)

Application of Professional Judgement (Schon 1988)

The Existence of Governing Body (CPA membership)

Professions: The 'market control' view (Monopolistic Power, Self Regulation (West 2003)

Evolution of the profession

Professionalisation: Larson - Power creation

Power and Exclusion: (Ethics Vs Profit - Gold Collarism, Kelley 1985)

Ideals of Accounting: E's Education, Ethics, expertise and Entrepreneuship

Accoutnting Under Challenge

Credibility of the profession: Ethics & Failure: GFC failure-Manage Risk & underdtanding Accounting valuation

Greater Regulation: AASB, Asic, FRC reporting, and Corporation

Restoring Credibility to accounting: IFAC 2009 Recomendations, Sarbanes Oxly 2002, Coso 2004, CLERP 9, CPA,)

Reading 1.1: How softskills can boost your career

Reading 1.2: The strategic accountant

Reading 1.3: Public practice: firm of the future

Reading 1.4: Profile: Roel Van Vegel -The sweet sounds of success

Questions: 1.1 Recall Lonergan' GFC failured, Was that slow reaction the only cause of GFC?

Questions: 1.2 Outline 4 possibles accountig-related roles with an SME and for each role indentify the task to be undertaken?

Questions: 1.3 Reading 1.4. Is that busienss ME or an SME? How did the PAIB add value to Andrew Rueu's business?

Questions: 1.4 Why have SME's not relied in the past on theirexternal accoutnants for business asvisory?

Questions: 1.5 Discuss 4 situations where accountants may aplly professional judgements in their course of work?

Module 2: Ethics

Part A: Professional ethicsApply the concepts of service ideal

The well-being of society

The pursuit of excellence ( Professional Behaviour)

Community service (Relationship of trust)

A code of ethics for professional accountants

The conceptual framework (principles-based) approach (APESB : blended code of Principles and rules)

Threats

Examples of threats

Safeguards (Institutionals & In the work Environement)

The public interest - an introduction to the code (Accountat primary loyalty is with the public - not client/employer)

Fundamental principles of professional conduct

Integrity(Straigforward, honest - Financial information)

Objectivity (Impartial, honest, free from conflict of interest)

Professional independence to the provision (Independence=Objectivity + Integrity)

Independance of mind (reality ) and appereance(more desvastating, Lack of indepen)

of assurance service

Common threats to independence (Examples)

Professional independence in practice (s290-291)

Provision of non-audit service to an audit client (S290) - Additonal value for an Audit Client)

Professional competence and due care

Confidentiality

Professional behaviour

Code of ethics for members in public practice

Professional appointment (acceptance should no be granted automately - Solicitation)

Referrals (special assigment)

Conflicts of interest

Incompatible activities (self interest threat)

Conflicts between two or more clients (members must not provide services unless consent to do it is received)

Second opinions (seek permission from clients)

Fees and other types of remuneration

Professional fees (billing arrangements)

Contingent and referral fees (Actions of transactions/Result of services)

Commissions and soft-dollar benefits

(Inconsitent with CPA - Professionalims, Fees for commissions: Self interest threat to objectivity)

Marketing professional services (Consistency with Professional Behaviour)

Code of ethics for members in business

Potential conflicts (Undertake task inconsistent with professional duties)

Preparation and reporting of information and earnings management (Revenue Recognition, Greed)

Reporting with integrity (Public Interest - trust)

Professional And ethical failures by menbers/public practice - Sonya Denisse & Trevor Neil)

Financial interests (Threats and Safeguards)

Gifts, hospitality and inducements

Self-regulation and professional discipline

The profession's self-regulatory process

Accounting professional and ethical standards board (APESB) (high level of Professional Practice)

Roles of APESB

The quality assurance process (Components: Standard setting, Conformity withstadards, preactice review, Firm regulations)

APES 320 Quality control for firms

Policies and procedures for address each element

Professional discipline (To achieve credibility & confidence of the general Public / Sources of complaint, CPA)

Procedures

Penalties and appeals

Part B: A conceptual framework for ethical behaviourTheoretical approach to ethics

A concept map

Normative theory - 2 key functions:

(Framework for judging moral righteness and framework decision making to resolve Ethical problems)

Teleological theories (consequential)

Ethical egoism

Differences between psychological egoism, ethical egoism (table 2.5)

and utilitarianism

Utilitarianism

Five basic steps

Limitation of consequential and utilitarian analysis

Dentological theories (Duties)

Rights theory

Justice theory (Aristoteles)

A philisophical model of ethical decision-making (Mathison 1988)

Aplication of multiples theories to unethical dilemma

Virtue ethics

An introduction to professional and ethical judgment

Kohlberg's theory of cognitive moral reasoning and development

Six stages of cognitive moral development

Level 1: Pre-conventional

Level 2: Conventional

Level 3: Post-conventional

Levels of moral reasoning in accounting

Factors influencing decision-making

Individual (Cognitive development) - Kholbers theory

Organisational ( organisational culture, Code of ethics, Others significants)

Schein's six primary mechanisms(Leader rely on this, can achieve cultural success, cultural failure, cultural change)

Stress in the workplace

Professional (APESB)

Societal

Law and regulation

Culture (Confucionism: Japan, China), Relativism

Ethical decision-making models (Influences on an Individual Decision) - HEURISTIC

American Accounting Association Model (AAA) - Lagender & Rockness

Seven steps model

AICPA Decision Tree

Reading 2.1 Accountants, Ethical issues and the Corporate Governance text?

Reading 2.2 Six cures forcurrent Ethical Breakdowns

Reading 2.3 Ethics Decision tree fro CPAs in business and industry

Questions: 2.1 Consider Implications of an accountant with isufficient time to perform duties? What should you do?

Questions: 2.2 Your firm executes investment transactions for a client. You are now asked to audit this client, I s there a threat to yur independence?

Questions: 2.3 A new qualified CPA is asked to perform an audit to small company, The accountant has not experience in that field, What should you do?

Questions: 2.4 You have been asked to audti 1/2 year finanical statement, (second opninion?

Questions: 2.5 You mamage fundraisng company, Soft dollar benefits?

Questions: 2.6 New assurance Services without previuos experience, Does this complain with the Code of Ethics?

Questions: 2.7 Explain why integrity is an essential attributer of the profession

Questions: 2.8 Quality assurance and ethical issues arising from?

Questions: 2.9 Utiliarims definitions, problems and difffences?

Questions: 2.10 Does you employee have a right to enquiie into activitiess of your personal life? In realtion of rights theory?

Questions: 2.11 Which Stage of Kholbert theory of CMD best describe the decision making behaviour of Accountants

Module 3: Governance

Part A: Overview of Corporate Governance ( Information and Comunication)Why Good Corporate Goverance matters (balancing power of stakeholders = Performance + conformance)

Global Imperative ( Professional Accountants role : A+B)

Key Factors driving the need for better Corporate Governance

Why Corporate Governance is important to APEC economies( valuable source on international views)

Key Points / Benefits of Good Governance

Goverance and APEC views

Governance Definintions / Governance Involves

Agency and Governance ( Agents must be aware of concepts and principles of good Corporate Governance)

Components of Corporate Governance

Shareholders ( Bosch -1995) rights and Obligations

Individual Shareholders ( ASA , Media an Internet)

Institutionals Shareholders (Insurance companies/ funds ) (Hampel Report, now reflected in UK CGC)

Directors and Boards

Board of Directors (Bosh Report in Australia, Rogers CJ ( AWA Ltd…)

Board Chair - Independence( OECD: chair not mention should be Indep.. / UK CGC should be indep..)

Role of CEO - Agent of the Board ( Board member and CEO/ Agency relationship arise)

Type of Directors (Independent & non Independent Directors)

Committees of the Board

Risk Management, Nomination, Remuneration andAudit Committee

Audit Committee:( AASB: Objectives ans Resposabilitites, Benefists and limitations)Risk Management

Internal Control and Risk Management: ISA 215-Ifac2009, Sarbanex Oxley Act US 2002)

COSO internal Control - Integrated Framework

Internal Control and Risk systems - Including accounting , Risk Control and internal audit

Management of the performance elements ( Practical aproaches to exercise considerable judgements)

Balance Scorecards: Kaplan and Norton

Strategic Scorecards: PAIB - IFAC, CIMA'S obejectives

Economic value added - EVA- ROI

Internal and External Auditors

Regulators : Essential to ensure that companies can compete against each other in a fair an reasonable manner)

* Regulations versus De Regulations (Free market (self interest- Miltond Friedman)

Principle based ( OCED, ASX CGC and UK FRC) versus rules -based regulations ( US Sarbanes - Oxley Act)

Senior Managers and employees generally

Other stakeholders ( Governements, Customer, suppliers, environement and Societies generally)

Thirty years of Corporate Goverance

International Development Timetables

United Kingdom

Cadbury report (1992) ( Concept of Comply or Explan / If not, Why not reporting)

Financial aspects of corporate governance (1992)

Principal recommendations of the board

Non-executive vs independence directors

Strategic role of the board

Greenbury Committee

Enhanced transparency on directors' remunerations

Hampel committee

Importance of corporate governance

The combined code and the turnbull guidance

Combined code of 18 principles and 48 code provisions

Number of non-executive directors

Higgs review and smith report

Composition of the board and sub-committee

UK combined code on corporate governance (FRC 2008)

United States

Committee of sponsoring organisations of threadway commission (COSO)

(Report realted to Internal control and Enterprise risk management)

Internal control - integrated framework

Fradulent financial reporting

Enterprise risk management

Sarbanes-Oxley act ( Strenghtened Audit requirements, increase financial disclosures, Internal controls)

Audit reform

Corporate accountability

Financial disclosures,loans and code of ethics

Criminal fraud and whistleblowing

The business roundtable

Eight guiding principles of corporate governance

California public empliyees retirement system (CalPERS)

Corporate governance investment program

Other International Approaches

International Corporate Goverance Network

OECD Principles of Corporate Goverance

APEC

Australia

Bosch committee (1995)

Significant corporate governance issues

Ramsay report (2001)

Key recommendations on independence of auditors

ASX corporate governance principles and recommendations (2007)

Eight Principles and recommendations

Corporate Law Economic Reform (CLERP) 9 Act (2004)

Audit reform

Financial reporting

Other (Whistleblowing, shareholder participation)

Governance in other sectors

Corporate governance in not-for-profit sector

Corporate governance for SMEs

Public Sector ( Upright Report: Government entitites examination)

Codes and Guidance

OECD principles of corporate governance

Six principles of corporate governance

Basis for effective corporate governance framework

Rights of shareholders and key ownership functions

Equitable treatment of shareholders

Role of stakeholders in corporate governance

Disclosure and transparency

Other principles regarding disclosure/transparency

Responsibilities of the board

GFC Response: Understanding The OECD Principles

Steering Group: Complementary of OECD principles

UK Finanancial Reporting Council Corporate Governance Code (Apendix 3.1) last part of material mod.4

Main Principle: Comply or explain

Section A: Leadership (Roles of Board, Divison of Resposabilitites, chairman, non Executives directors)

Section D: Remuneration (Components of remuneration, Procedures)

Section E: Realtion with Shareholders( Dialogue, Constructive use AGM)

ASX CGC Recommendations (if not why not reporting requirement)

Lay solid foundations for management and Oversight

Structure the board to add value

promote Ethical and responsible decision making (code ofconduct)

Safeguard Integrity in Financial Reporting (Audit committee)

Make timely and balanced disclosure

Respect right of Shareholders

Recognise and manage risk

Remunerate fairly and Responsibly - Remuneration Committee

Code for Institutional Investors ( ways for instituional Shs views to performance)

The UK FRC Stewardship Code ( disclosure of voting activities)

The Blue Book : Guide for fund managers and Corporations 2009 - important for FSC)

Part C: International Perspective on Corporate Goveranance

Alternative System of Goverance

Market Based System (outsider system, Shareholder systems or Anglo Saxon System)

Corporate Goverance of US and UK (Shareholders primary focus)

CEO/Chair same - Principal agent realtionship

Focus in Funds and Insurance company, less in banks ( Disclosures based)

Realtionship Based System - European approaches

Stakeholders Active recognized

Banks play an active role, long term large shareholders protect to threat of takeovers.

Insiders groups monitor management, Reduce of Agency problems

Different polititcal, legal and regulatory Structures (European contries)

Germany and France

Relationship Based System - Asian Aproaches

Differing Corporate Governance models ( Concentration of Ownership of companies)

China: Governement - controlled organisation, 6 maint types of Enterprises.

Majority Shs - Single extende family - East Asia - Board dominated by majority shs)

Japan(Outsider boards representing SHs or board member are insiders leading managemet)

Family Controlled companies and Business Networks - East Asian

Part D: Case Studies of Governance Failure

Section B: Effectiveness ( Board: Composition, Appointment, Commitment, Development, Information, Supprot,

Evaluation, Reelection)Section C: Accountability(Financial and Businessreporting, Risk management and Internal control, Audit Committee

and Auditors,)

Company Law, Employee representation, Stakeholders issues, Shs rights, Board Structure, Supervisory

body, Disclousre

Case 3.1 Enron

Case 3.2 HIH

Case 3.3 Global Financial Crisis

Bailouts, Bankrupticies and takeovers

Key issues arising from the global financial crisis and Repsonses IFAC (paib 2004)

Reading 3.1: The corporate governance lessons from the financial crisis

Reading 3.2: The chairman reflects

Reading 3.3: The social responsibility of business is to increase its profits

Reading 3.4: Responsible business engagement with society

Questions: 3.1 Reasons Why good corporate Goverance is seens to be important and benefitial

Questions: 3.2 What is major issue that arise form a n agency relationship, where powers of control are delegated. (Conflict of intererst)

Questions: 3.3 Describe role of CEO and givexamples of the activities the CEO and board should perdorm?

Questions: 3.4 Audit Committee, Benefits and limitations

Questions: 3.5 Voluntary Exchange meaning, freem arket and regulated markets

Questions: 3.6 What are key issues of governance affecting not for profit organisatiosn?

Questions: 3.7 What do you consider are the main corporate governance issues affeccting small business

Questions: 3.6 What are key issues of governance affecting not for profit organisatiosn?

Questions: 3.15 Market based system * Strenghts and Weaknessess

Questions: 3.15 Relationship based systems Advantages and disadvantages

Module 4: Corporations and their stakeholders

Stakeholder Concepts

Stakeholder map

Nature of the corporation and key stakeholder relations ( table 4.1)

Issues arising from stakeholder theory

Agency Theory and Remuneration

Corporate Governance and controlling agents ( Corporate Goverance and Theory problems)

Directors and other Officers

Agency and delegated powers ("Utility maximising Agent" - not acting in the best interest of principal)

Agency Theory (Jensesn and Meckling - 1976 : 2 Key assumptions, Barriers to Goal Congruence)

Agency Costs

Residual costs: (Loss & Cost under performance : An agency cost borne by principals)

Over-consumption of perks : (lack og goal congruence: reduce both profitability and Cash flow)

Empire building: Financial rewards: Power and influence increase: purcharse subsidiare)

Risk avoidance: (Risky investment avoidance because of fixed salary package)

Differing time horizons : Perpetual cash flows, interest in the firm for the duration of theiremployment)

Bonding costs : reducing residual & monitoring cost for a greater remuneration - borne by agent)

Monitoring costs : Cost associated by principals in order to know & control agency matters)

Remuneration Issues

Remuneration of Executive & non executives director - UK FRC CGC 2010

Disclosure and transparency :non Individual should set their own remuneration.

Remuneration Disclosure - International Approaches : France, UK, USA

Employees (vital and internal Stakeholders - OECD Guidelines)

Australian Consumer Law (unfair practices, penalties and compensation)

Occupational health and safety

Fair pay and working conditions

Family and Holiday Entitlements: Al, Paternity & maternity Leave, others type of entitlements)

Ethical obligations - Employee Goverance (Code of conduct - Satysfying the objectives of the OECD principles

Case examples of Failure : Nike, James Hardie

Whistleblowers

Australian Corporation Act Whistleblower Protection ( Example: Sherron Watkins - ENRON)

Trade and labour unions (Collectives Bargaining)

External Stakeholders ( Considered outsiders in term of Governance)

Global Society and Environment (corporations to asssume ethicals leadership)

The Economic and Legal System

The legal System as a Stakeholder (Good laws to achieve good outcomes and should do so reliably and acces to court)

Competition and Protecting Markets for Goods and Services ( monitor by ACCC)

Competition Policy ( Competitve markets to avoid Monopolist Corporation) - Policy Objectives

Competition and Stakeholders (Maintain competition btw technologies in the bradbank sector, internet providers)

Ethical obligations (Collusion btw competitor very bad) - Tab 4.2 International Competition legislation and Regualtions

Regulations on anti-competitive behavious (Detailed rules to regulate:

Abuse of market power ( Predatory Markets - ACCC: Penalties against Cabagge and Intel)

Mergers and acquisition (reduce # of competitors - prohibited or limited)

Agreement between competitors - Cartel Conduct

Compettitors Collusion -Cartel Behaviour

Output Restrictions ( Agreemts wil lcause Shortage in markets - price raises.

Allocating Customers Suppliers or territories ( Creating Artificial Monopolies)

Bid Rigging (Work collude - Competitve Tenders Inflate price to win a bid)

Price Fixing (Parallel Conduct) - Examples

Unilateral restrictions on Supply (exclusivng dealing) - Third line forcing: Ilegal, anticompetitive and lessen competition)

Resale Price Maintenance (Ilegal practice: sells products above a stated price)

Approvals Procedures (Franchises: formal mechanisms to authorise third line forcing - ACCC)

Proof, penalties and redress - Criminal and Civil

Laws Leading to Criminal Penalties (proof beyond reasonable doubt - Punishment: fines/Jail)

Laws with Civil Outcomes and Civil Penalties (Balance of probabilities - Fines: penalties payables to the state)

Redress and Penalties for anticompetitve breaches (Redress or remedies, Damages or compensation, Penalties,others)

Legal Compliances and Governance (Other real costs)

Performance-based remuneration (Fixed:individual/corporation performace and At Risk portion: Reaching certain goals and

performance beanchmarking)

Workable Competititon ( requirements of workable or effective compettion) (judgements based in Balance of Probabilitites)

Non executives Directors: not performance based incentives, Based only reasonable retur for time dedicated to

corporation's businesses

Executives Directors : Remuneration committee: remunerated for their perfomance/achieving of goal congruence

Compliance Programs : Competition Law, Consumer Law, corporate law and others) ) Main benefits)

Avoiding Harm ((posible benefits for Compliance programs, Benefits for all major stakeholders)

Consumers and Customers

Ethical obligations (Long term sustainable realtionshipconsumers (customers)and final product users)

Regulation and consumer protection( Table 4.3 Consumer protection Legislation)

Guarantees and warranties

Misleading Conduct a representation

Truth versus truthful impression in advertising (Examples :Joan Sutherland and Nudie Foods)

Puffery versus deception (Extreme exageration: Puffery is aceptable) (Deceitfull communication)

Unconscionable conduct ( sufficiently unfair as to be considered as Unconscienable)

Examples of transactions : Amadio Case - Consumer Law)

Tests for unconscionable conduct

Suppliers and lenders

Considering Suppliers and Lenders as a Stakeholders ( table 4.4)

Expanding Ethics (Minimum Ethical Standards should be displayed by supliers / HSBC Supplier code of Conduct)

Financial Markets as a Stakeholders (2 governing Theories:Efficency of Markets and Investor Confidence)

Roles of Markets ( ROI)

Roles of the Media

Role of Other Intermediaries ( Investments banks, Consultants and Auditors)

Protecting the Financial Markets (Directord / Officers breaking the law)

Insider Traiding rules (Key Test in determaining Insider trading, Examples of Insider Trading, Case: PAroo)

Owners ( UK FRC CGC (FRC 2010a: Succes of Companies and Informed Shareholders)

Shareholders group and descriptions (Table 4.5)

Rights, remedies and responsibilities (Table 4.6 OECD 2004: Shareholders rights)

Redress or remedy ( Shs unhappy, Unfairly treated: Example - Minority Shs)

Representation (OECD, UK FRC, ASC CGC : Guanrantee rights)

Shareholders representation ( Table 4.7), Example of iNstitutional Shs)

The corporation

Distinct features

Types of corporations (Table 4.8, Level of Companies: Figure 4.2)

Board of Directors / Board Structure

Directors should be formally appointed, Types of Behaviour:De facto,Shadow director, type of Agents)

Duties and responsibilities of directors - Key Duties:

Conflict of interest (Independence od Ppereance and Independence of mind help to assess conflicts of interest)

Act in the corporation's best interest ( good faith, Honestly and without fraud or collusion)

Nominee directors ( use power for proper Purposes when nominate & appoint directors))

Act for proper purpose ( do not abuse their power - Example Advance Bank)

Duty to retain discretion ( do not delegate to theird discretion to act as a director)

Duty of care, skill and dilligence (IN australia : SAFE HARBOUR RULE)

Insolvent trading (UK / US flexible system, Australia: stricter *Shut down the organisation)

Takeovers

Legal and ethical considerations (Conflict interest, Lack of Disclosure, Anti Trust andMOnopolies issues)

Remedies and Enforcement

Types of Remedies

If directors refuse to act - Statutory derivative action

Account for Profits

Compensation and damages

Rescission and restitution(restoration of property)

Injuction

Appointment and Cessation

Appointment (UH FRC 2010: directors of top 350: Every year to be subject to shs vote every year as a Director)

Resignation

Removal

Disqualification ( automatic, disqualified 5 years)

Automatic disqualifications (criminal Offences)

Disqualifications on applications (5 to 20 years - civil penalties)

Ethics of disqualification

Question 4.1 Anglo American legal system : Commom Law and Cvil law system proved protection to Stakeholders interest?

Question 4.2 Diffrences between Company and corporation?

Question 4.3 Dexribe Key aspects of the pricncipal and agents problems thatexist within Corporations and result of loss of value for stakeholders

queation 4.5 Withleblowing and why has become an inportant component of good corporate governance

Module 5: Corporate social responsibiliy

Definition and Overview

The evolution of CSR - A brief hstory

Definition (Commmision of European Communitites, CPA - CSR reporting, Australian CSR reporting practices)

The concept of accountability (Linkage between accounting and accountability, Responsabilitties)

Gray, Owen and Maunders (1987)

Role of Corporate report (and corporate reporting)

Social reporting (Components of CSR reporting)

GRI guidelines on Social performance indicators

The aspects that social reporting encompasses

Environment reporting (Component of CSR reporting)

GRI guidelines on Environmantal performance indicators

Sustainability reporting

Definition of Sustainability Reporting - GRI 2007 guidelines

GRI performance indicators - (Economic, social and Enviromental performance categories)

The externalities created by business organisations (Definition, Positive (benefits) or Negative (cost), qualitatives terms)

Gray and Bebbington (1992) on sustainable cost / Calculations

The importance of climate change and its relevance to CSR reporting (Carbon tax scheme)

Alternative perceptions about the responsibilities of organisations ( Organisations responsabilities/Accountabilities)

Milton Friedman on the role of business (shs focus - not strong advocate for Social and envirponemental reporting))

Alternative view - Mathews 1993 ( Community Expectations))

Who are the stakeholders of an organisation?

Definition (Freeman 1984) of stakeholders, BHP, Toyota and Amcor focus on Accountability)

The shareholder primary perspective

Shareholder primary Vs social contract perspective

Motivations for embracing CSR reporting (Accountability to Stakeholders or economic focused to protect Shs value)

Elightened self-interest

Good faith requirements

Drivers towards better CSR (BCA) "(Doing right thing" BCA is based in Managerial Reasosining rather than ethical)

Motivations for disclosing social and environment information in CSR (Deegan 2009)

Stakeholder management

Stakeholder theory - The Managerial branch

Gray, Owen and Maunders (1987) - (Powerful & Influence Stakeholders in order to get support and Approval)

Stakeholder theory - The ethical branch

(Managers have a fiduciary duty to all stakeholdersrather than just Shs)

Organisational legitimacy (highly motivation for corporations to provide CSR information)

Legitimacy theory ( Community perceptions - disclousres in order to survive - non to demostrate Accountability)

The social contract (Organisations to meet requirements of both legitmacy and relevance-Schocker&Setti)

Methods to legitimise its activities (Dowling & Pfeffer 1975)

Course of actions to repair legitimacy (Lindblom 1994)

Empirical evidence consistent with legitimacy theory

Other incentives tied to maximising the value of the organisation (WBC - Environmental issues ans Financial positions)

Preferential capital flow (Investments portfolis - VicSuper Sustainability report)

Brand and reputation (Social and Environmental performance - remedial actions to rebuild lost legitimacy (Islam &Deegan)

Risk management incentives(Direct&Indirect Costs, Reducing risk - climate change for transparent reporting)

Limitations of traditional financial reporting

Accounting framework focus in Shareholders primacy perspective.

Cannot answer questions related to SocIAL AND Enviromental Performance)

Definitions of Elements of Financial reporting

Enviromental Resources (Externalities(Benefits/Cost) not controlled by Entity - not considered Assets of the Entity)

The practice of discounting future cash flows

The Stern review on the Economics of climate changes (Value of the cost of climate change overstimated)

Issues of 'reliable measurement' and 'probability' (JI and Deegan - Laibilites & Provsions realted to Externalitites difficult to measure)

Yankelovich - Measurement issue - assessment - wrong practice)

The entity assumption (Externalitites to be ignored)

Current regulations for CSR reporting

Requirements embodied within the Corporations Act and accounting standards

Corporation Act :Directors to Provide financial details of Environmtnal performance)

Corporations act section 299 (1)(f) on environmental performance / Asic require entities to disclose financial/non financial)

Corporations act section 299 A on Directors' report

AASB 137 Provisions, contigent liabilities and contigent assets -Uncertain(Entities no quantify externaliites, non measureable/reliable)

AASB 116 Property, plant and equipment

National Greenhouse and Energy Reporting Act 2007 - Objectives

NGER Act: Reporting thresholds

National Pollutant Inventory (NPI) - Howes 2001 - NPI compel's business to release information

Energy Efficiency Opportunities Act 2005 - required to undertake detailed energy assessment to identify oportunitites)

Other legislations aimed at motivating improvements in Social and Environmental performance)

Australia: Independent pricing and regualtion tribunal, NSW ENErgy Saving Scheme, Commonwealth Renewablwe Energy target Scheme)

European Union Emmisions Trading Scheme (Creation of Emmisions allowances)

Voluntary frameworks for CSR reporting

The global reporting initiative (GRI) - G3 Guidelines, Sectors Suplements, Protocols, National Annexures)

Practical applications and testo to help to apply this principle:

External factors in defining material topics

Internal factors in defining material topics

The Guidelines then recommended content

International guidance in CSR-related performance and reporting

Carbon disclosure project (Carbon emission and climate change represent significant business risk - Investment decision)

Accountability AA1000 series & principles

Equator Principles (determine, assess ans manage Social and Environmental risk in project financing)

The Greenhouse gas protocol GHC Kyoto Protocol - 2 Standards / objectives

Trucost (Help to identify high -risk sectors for investments / cash flows - meet environemntal reporting requirments)

Social audits and their relationship to CSR reporting (Elkington -Definintion: Assess performance in realtion to Society requirements and expectations)

The Body shop

Nike

Social Accountability International (SAI) - Social Accounting Standards SA2008)

Examples of best practice and innovative reporting

CSR The zone of acceptability (Identify leading edge / Reporting Sophisitcation)

ACCA sustainability reporting awards judging criteria (VicSuper, Fuji xerox, CPA Sustainability report - Positive attributes and recommendations)

Integrated Reporting: IIRC missions and objectives for an integrated reporting framework, roles of IIRC

International initiatives on climate change - Institutional Framework to reduce emmision(mitigation) and adapting toclimatechange(Adaption). - Kyoto Protocolo

The Copenhagen accord (interim measure to address various aspects of climate change)

Climate change accounting techniques (Cap-and trade method for carbon emmision - designed as a market based aproach)

Financial accounting treatment for Cap and Trade scheme (Fixed price and Floating-price)

Accounting for the levels of actual emissions (3 Categories), NCOS -set up by Australian Governement; Genuine csrbon offset)

Greenhouse gas emissions ( yarra Valley Water Sustainability report

Environmental management accounting

IFAC to define EMA, IN realtion to waste - Glad Stated, Deegan: prescrition in relation to creating more refine accounts of waste)

Deegan - EMA Benefits

Corporate governance mechanisms aimed at improving social & environmental perf

Accountable and Transparent, Stakeholders engagement to fulfill thwir environmental and Social responsabilities

ISO 14001 Environemntal Management System and ISO 26000 Guidance on Social responsibility

Sustainability performance and remuneration - Amcor Sustainability Report: core values/Performance indicators

Question 1 : Linkage between Accountability and Corporatereporting

Question 2 Nature of Externality, (positive and negative externality

Question 6 Explain how any assessment undertaken by management can affect the audience of the reports

Question 7 Limitations of financial reporting practices realted to climatechange

Question 8 Enlightened self interest against Sustainbale development as a guiding principle

Question 18 Identify 5 corporate governance policies thatcould act to enhance an organisation's social and environmental performance.

Eco-balance (mass balance:Inflows-production process/outflows -finished products, organisattion to formulate measure to reduce

enviromental impact(recycled, waste products, waste and emissions)

Page #

1 5-6

1 5

1 6

1 7

1 8

1.- Understanding Accounting (Social practice: Professional capabilities + Service ideal)TSKE/SSKE 1 8

1 9-10

1 11-12

1 11-12

1 11-12

1 11-12

Capabilities Considerations (Sufficient capabilities=complex&difficult professional Judgements) 1 13

1 13-14

13-14

1 13-14

1 15

1 16

1 16

1 16

1. Accountants employed in Large Business (Strategy development & implementation) 1 17

2. Public Practice: Accounting Firm Environment-Big 4, Large 7 second tier firms) 1 18

3. SME's ( very small SME's relying in SMP's practice. Large firms :few or one Accountant) 1 19-20

IFAC: SME'S focus on compliance, not being much value in performance(profitability) 1 21

PAIB: Accountans reponsible to generate value for the success of company. 1 22

Ethics ( Moral, Ethics, Business Ethics, Professional Ethics; APES 110, Guidelines &rules) 1 24-25

1 27

1 27-28

1 27-29

1 30

1 31

1 32

1 32-33

1 33

1 34

1 35

1 35

1 36

1 37

Professions: The 'market control' view (Monopolistic Power, Self Regulation (West 2003) 1 38

39

39

39-40

Ideals of Accounting: E's Education, Ethics, expertise and Entrepreneuship 41

42

Credibility of the profession: Ethics & Failure: GFC failure-Manage Risk & underdtanding Accounting valuation 42-43

44

Restoring Credibility to accounting: IFAC 2009 Recomendations, Sarbanes Oxly 2002, Coso 2004, CLERP 9, CPA,) 45

Questions: 1.1 Recall Lonergan' GFC failured, Was that slow reaction the only cause of GFC?

Questions: 1.2 Outline 4 possibles accountig-related roles with an SME and for each role indentify the task to be undertaken?

Questions: 1.3 Reading 1.4. Is that busienss ME or an SME? How did the PAIB add value to Andrew Rueu's business?

Questions: 1.4 Why have SME's not relied in the past on theirexternal accoutnants for business asvisory?

Questions: 1.5 Discuss 4 situations where accountants may aplly professional judgements in their course of work?

Page #

2 7

2 7

2 7

2 8

2 8

2 9

The conceptual framework (principles-based) approach (APESB : blended code of Principles and rules) 2 9-11

2 11

2 12-13

2 13-14

The public interest - an introduction to the code (Accountat primary loyalty is with the public - not client/employer) 2 15

2 16

Integrity(Straigforward, honest - Financial information) 2 16

Objectivity (Impartial, honest, free from conflict of interest) 2 17

Professional independence to the provision (Independence=Objectivity + Integrity) 17

Independance of mind (reality ) and appereance(more desvastating, Lack of indepen) 17

2 18

2 20

Professional independence in practice (s290-291) 2 21

Provision of non-audit service to an audit client (S290) - Additonal value for an Audit Client) 2 22

2 26

2 27

2 28

2 29-30

Professional appointment (acceptance should no be granted automately - Solicitation) 2 30-31

2 31

2 31

2 31

Conflicts between two or more clients (members must not provide services unless consent to do it is received) 2 32

2 33

2 3

2 33

Contingent and referral fees (Actions of transactions/Result of services) 2 34-35

2 35

(Inconsitent with CPA - Professionalims, Fees for commissions: Self interest threat to objectivity) 35

Marketing professional services (Consistency with Professional Behaviour) 2 36

2 36

Potential conflicts (Undertake task inconsistent with professional duties) 2 36

Preparation and reporting of information and earnings management (Revenue Recognition, Greed) 2 37-38

2 39

Professional And ethical failures by menbers/public practice - Sonya Denisse & Trevor Neil) 2 38

2 42

2 42

2 43

2 44

Accounting professional and ethical standards board (APESB) (high level of Professional Practice) 2 43

2 44

The quality assurance process (Components: Standard setting, Conformity withstadards, preactice review, Firm regulations) 2 44

2 45

2 45

Professional discipline (To achieve credibility & confidence of the general Public / Sources of complaint, CPA) 2 45

2 46

2 47

2 48

2 48

2 48-49

(Framework for judging moral righteness and framework decision making to resolve Ethical problems) 49

2 50

2 50

Differences between psychological egoism, ethical egoism (table 2.5) 2 51-52

2 52

2 52

2 52

2 52

2 53

2 54

2 54

A philisophical model of ethical decision-making (Mathison 1988) 2 55-56

55-56

2 57

2 58

2 58

2 59

2 59

2 60

2 60-61

2 61

2 62

2 62

Organisational ( organisational culture, Code of ethics, Others significants) 2 62-63

Schein's six primary mechanisms(Leader rely on this, can achieve cultural success, cultural failure, cultural change) 2 64

2 65+66

2 66-67

2 67

2 67-68

2 68-69

Ethical decision-making models (Influences on an Individual Decision) - HEURISTIC 2 70

2 71

2 71-72

2 71-72

Questions: 2.1 Consider Implications of an accountant with isufficient time to perform duties? What should you do?

Questions: 2.2 Your firm executes investment transactions for a client. You are now asked to audit this client, I s there a threat to yur independence?

Questions: 2.3 A new qualified CPA is asked to perform an audit to small company, The accountant has not experience in that field, What should you do?

Questions: 2.4 You have been asked to audti 1/2 year finanical statement, (second opninion?

Questions: 2.6 New assurance Services without previuos experience, Does this complain with the Code of Ethics?

Questions: 2.10 Does you employee have a right to enquiie into activitiess of your personal life? In realtion of rights theory?

Questions: 2.11 Which Stage of Kholbert theory of CMD best describe the decision making behaviour of Accountants

Page #

Overview of Corporate Governance ( Information and Comunication) 3 5

Why Good Corporate Goverance matters (balancing power of stakeholders = Performance + conformance) 3 5

3 5

Key Factors driving the need for better Corporate Governance 3 5

Why Corporate Governance is important to APEC economies( valuable source on international views) 3 6

3 6

3 7

3 7

Agency and Governance ( Agents must be aware of concepts and principles of good Corporate Governance) 3 8

3 9

3 9

3 10

Institutionals Shareholders (Insurance companies/ funds ) (Hampel Report, now reflected in UK CGC) 3 10-11

3 12-13

Board of Directors (Bosh Report in Australia, Rogers CJ ( AWA Ltd…) 3 14-16

Board Chair - Independence( OECD: chair not mention should be Indep.. / UK CGC should be indep..) 3 16

Role of CEO - Agent of the Board ( Board member and CEO/ Agency relationship arise) 3 16-17

3 18

3 19

Risk Management, Nomination, Remuneration andAudit Committee 3 20-23

Audit Committee:( AASB: Objectives ans Resposabilitites, Benefists and limitations) 3 243 24

Internal Control and Risk Management: ISA 215-Ifac2009, Sarbanex Oxley Act US 2002) 3 25

3 26

Internal Control and Risk systems - Including accounting , Risk Control and internal audit 27

Management of the performance elements ( Practical aproaches to exercise considerable judgements) 3 27

3 28

3 28

3 29

29-30

Regulators : Essential to ensure that companies can compete against each other in a fair an reasonable manner) 3 30

Regulations versus De Regulations (Free market (self interest- Miltond Friedman) 30-31

Principle based ( OCED, ASX CGC and UK FRC) versus rules -based regulations ( US Sarbanes - Oxley Act) 31

3 32

Other stakeholders ( Governements, Customer, suppliers, environement and Societies generally) 3 32

3 33

3 34

34

Cadbury report (1992) ( Concept of Comply or Explan / If not, Why not reporting) 3 34

3 34

3 34

3 34

3 34

3 34

3 34

3 34

3 34

3 34

Combined code of 18 principles and 48 code provisions 3 34

3 34

3 34

3 34

3 34

35

Committee of sponsoring organisations of threadway commission (COSO) 3 35

(Report realted to Internal control and Enterprise risk management) 3 35

3 35

3 35

3 35

Sarbanes-Oxley act ( Strenghtened Audit requirements, increase financial disclosures, Internal controls) 3 35

3 35

3 35

3 35

3 36

3 36

3 36

3 36

3 36

3 37

3 37

3 37

37

37

3 37

3 37

3 37

3 37

ASX corporate governance principles and recommendations (2007) 3 13

3 13

3 14

3 14

3 38

3 38

3 40

3 40

3 41

42-44

45

3 45

3 45

Basis for effective corporate governance framework 3 45

Rights of shareholders and key ownership functions 3 46

3 47

3 48-49

3 49-50

Other principles regarding disclosure/transparency 3 50

3 50-51

52-54

Steering Group: Complementary of OECD principles 52-54

UK Finanancial Reporting Council Corporate Governance Code (Apendix 3.1) last part of material mod.4 54-55

1-12

Section A: Leadership (Roles of Board, Divison of Resposabilitites, chairman, non Executives directors) 1-12

1-12

1-12

Section D: Remuneration (Components of remuneration, Procedures) 1-12

Section E: Realtion with Shareholders( Dialogue, Constructive use AGM) 1-12

ASX CGC Recommendations (if not why not reporting requirement) 56

57

58

promote Ethical and responsible decision making (code ofconduct) 59

Safeguard Integrity in Financial Reporting (Audit committee) 60

61

62

63

Remunerate fairly and Responsibly - Remuneration Committee 64

Code for Institutional Investors ( ways for instituional Shs views to performance) 65

The UK FRC Stewardship Code ( disclosure of voting activities) 3 65-66

The Blue Book : Guide for fund managers and Corporations 2009 - important for FSC) 3 66-67

69

3 69-72

Market Based System (outsider system, Shareholder systems or Anglo Saxon System) 3 69-72

Corporate Goverance of US and UK (Shareholders primary focus) 3 69-72

Focus in Funds and Insurance company, less in banks ( Disclosures based) 69-72

3 72

3 72

Banks play an active role, long term large shareholders protect to threat of takeovers. 3 72

Insiders groups monitor management, Reduce of Agency problems 3 73

Different polititcal, legal and regulatory Structures (European contries) 3 73

3 73

3 74

3 75

Differing Corporate Governance models ( Concentration of Ownership of companies) 3 75

China: Governement - controlled organisation, 6 maint types of Enterprises. 3 76

Majority Shs - Single extende family - East Asia - Board dominated by majority shs) 3 77

Japan(Outsider boards representing SHs or board member are insiders leading managemet) 3 77

Family Controlled companies and Business Networks - East Asian 78

79

Section B: Effectiveness ( Board: Composition, Appointment, Commitment, Development, Information, Supprot,

Evaluation, Reelection)Section C: Accountability(Financial and Businessreporting, Risk management and Internal control, Audit Committee

and Auditors,)

Company Law, Employee representation, Stakeholders issues, Shs rights, Board Structure, Supervisory

body, Disclousre

80

81

3 82-83

84-85

Key issues arising from the global financial crisis and Repsonses IFAC (paib 2004) 86-87

Questions: 3.1 Reasons Why good corporate Goverance is seens to be important and benefitial

Questions: 3.2 What is major issue that arise form a n agency relationship, where powers of control are delegated. (Conflict of intererst)

Questions: 3.3 Describe role of CEO and givexamples of the activities the CEO and board should perdorm?

Questions: 3.6 What are key issues of governance affecting not for profit organisatiosn?

Questions: 3.7 What do you consider are the main corporate governance issues affeccting small business

Questions: 3.6 What are key issues of governance affecting not for profit organisatiosn?

Page #

4 4

4 5

4 5

4 6

Corporate Governance and controlling agents ( Corporate Goverance and Theory problems) 4 6

4 7

Agency and delegated powers ("Utility maximising Agent" - not acting in the best interest of principal) 4 9-8

Agency Theory (Jensesn and Meckling - 1976 : 2 Key assumptions, Barriers to Goal Congruence) 4 8

4 11

Residual costs: (Loss & Cost under performance : An agency cost borne by principals) 4 11

Over-consumption of perks : (lack og goal congruence: reduce both profitability and Cash flow) 4 11

Empire building: Financial rewards: Power and influence increase: purcharse subsidiare) 4 12

Risk avoidance: (Risky investment avoidance because of fixed salary package) 4 12

Differing time horizons : Perpetual cash flows, interest in the firm for the duration of theiremployment) 4 12

Bonding costs : reducing residual & monitoring cost for a greater remuneration - borne by agent) 4 13

Monitoring costs : Cost associated by principals in order to know & control agency matters) 4 13

4 14

Remuneration of Executive & non executives director - UK FRC CGC 2010 4 14

4 14

4 14

4 15

Disclosure and transparency :non Individual should set their own remuneration. 4 16

Remuneration Disclosure - International Approaches : France, UK, USA 4 16-17

4 18

Australian Consumer Law (unfair practices, penalties and compensation) 4 18

4 19

4 19

Family and Holiday Entitlements: Al, Paternity & maternity Leave, others type of entitlements) 4 20

Ethical obligations - Employee Goverance (Code of conduct - Satysfying the objectives of the OECD principles 4 21

4 22

4 23

Australian Corporation Act Whistleblower Protection ( Example: Sherron Watkins - ENRON) 4 24-25

4 26

4 27

Global Society and Environment (corporations to asssume ethicals leadership) 4 27

4 28

The legal System as a Stakeholder (Good laws to achieve good outcomes and should do so reliably and acces to court) 4 28

Competition and Protecting Markets for Goods and Services ( monitor by ACCC) 4 29

Competition Policy ( Competitve markets to avoid Monopolist Corporation) - Policy Objectives 4 29

4 29-30

Competition and Stakeholders (Maintain competition btw technologies in the bradbank sector, internet providers) 4 30-31

Ethical obligations (Collusion btw competitor very bad) - Tab 4.2 International Competition legislation and Regualtions 4 32

Regulations on anti-competitive behavious (Detailed rules to regulate: 4 32-33

Abuse of market power ( Predatory Markets - ACCC: Penalties against Cabagge and Intel) 4 32-33

Mergers and acquisition (reduce # of competitors - prohibited or limited) 4 32-33

4 32-33

4 34-35

Output Restrictions ( Agreemts wil lcause Shortage in markets - price raises. 4 34-35

Allocating Customers Suppliers or territories ( Creating Artificial Monopolies) 4 34-35

Bid Rigging (Work collude - Competitve Tenders Inflate price to win a bid) 4 34-35

4 35-36

Unilateral restrictions on Supply (exclusivng dealing) - Third line forcing: Ilegal, anticompetitive and lessen competition) 4 37

Resale Price Maintenance (Ilegal practice: sells products above a stated price) 4 37

Approvals Procedures (Franchises: formal mechanisms to authorise third line forcing - ACCC) 4 38

4 38

Laws Leading to Criminal Penalties (proof beyond reasonable doubt - Punishment: fines/Jail) 4 38-39

Laws with Civil Outcomes and Civil Penalties (Balance of probabilities - Fines: penalties payables to the state) 4 39

Redress and Penalties for anticompetitve breaches (Redress or remedies, Damages or compensation, Penalties,others) 4 40

4 41

Performance-based remuneration (Fixed:individual/corporation performace and At Risk portion: Reaching certain goals and

performance beanchmarking)

Workable Competititon ( requirements of workable or effective compettion) (judgements based in Balance of Probabilitites)

Non executives Directors: not performance based incentives, Based only reasonable retur for time dedicated to

corporation's businesses

Executives Directors : Remuneration committee: remunerated for their perfomance/achieving of goal congruence

Compliance Programs : Competition Law, Consumer Law, corporate law and others) ) Main benefits) 4 42

Avoiding Harm ((posible benefits for Compliance programs, Benefits for all major stakeholders) 4 43

4 43

Ethical obligations (Long term sustainable realtionshipconsumers (customers)and final product users) 4 43

Regulation and consumer protection( Table 4.3 Consumer protection Legislation) 4 43

4 43

44

Truth versus truthful impression in advertising (Examples :Joan Sutherland and Nudie Foods) 4 44

Puffery versus deception (Extreme exageration: Puffery is aceptable) (Deceitfull communication) 4 45

Unconscionable conduct ( sufficiently unfair as to be considered as Unconscienable) 4 46

4 47

4 48

4 48

48

Expanding Ethics (Minimum Ethical Standards should be displayed by supliers / HSBC Supplier code of Conduct) 49

Financial Markets as a Stakeholders (2 governing Theories:Efficency of Markets and Investor Confidence) 50

50

51

Role of Other Intermediaries ( Investments banks, Consultants and Auditors) 51

Protecting the Financial Markets (Directord / Officers breaking the law) 52

Insider Traiding rules (Key Test in determaining Insider trading, Examples of Insider Trading, Case: PAroo) 4 53

Owners ( UK FRC CGC (FRC 2010a: Succes of Companies and Informed Shareholders) 54

4 55-56

Rights, remedies and responsibilities (Table 4.6 OECD 2004: Shareholders rights) 4 56-57

Redress or remedy ( Shs unhappy, Unfairly treated: Example - Minority Shs) 57

4 57-58

Shareholders representation ( Table 4.7), Example of iNstitutional Shs) 58-59

59

4 60

4 60

4 61

Directors should be formally appointed, Types of Behaviour:De facto,Shadow director, type of Agents) 61

4 61

Conflict of interest (Independence od Ppereance and Independence of mind help to assess conflicts of interest) 4 62

Act in the corporation's best interest ( good faith, Honestly and without fraud or collusion) 4 63

Nominee directors ( use power for proper Purposes when nominate & appoint directors)) 4 63

Act for proper purpose ( do not abuse their power - Example Advance Bank) 4 63

Duty to retain discretion ( do not delegate to theird discretion to act as a director) 4 64

Duty of care, skill and dilligence (IN australia : SAFE HARBOUR RULE) 4 64

Insolvent trading (UK / US flexible system, Australia: stricter *Shut down the organisation) 4 65-66

4 66

Legal and ethical considerations (Conflict interest, Lack of Disclosure, Anti Trust andMOnopolies issues) 4 66

67

67

67

67

68

68

68

68

Appointment (UH FRC 2010: directors of top 350: Every year to be subject to shs vote every year as a Director) 4 68

4 69

4 69

4 69

4 70

Disqualifications on applications (5 to 20 years - civil penalties) 4 70

4 70

Question 4.1 Anglo American legal system : Commom Law and Cvil law system proved protection to Stakeholders interest?

Question 4.3 Dexribe Key aspects of the pricncipal and agents problems thatexist within Corporations and result of loss of value for stakeholders

queation 4.5 Withleblowing and why has become an inportant component of good corporate governance

Page #

5 6

5 6

Definition (Commmision of European Communitites, CPA - CSR reporting, Australian CSR reporting practices) 5 6

The concept of accountability (Linkage between accounting and accountability, Responsabilitties) 5 7

5 8

5 8

5 8

5 8

5 8

5 8

5 9

5 9

5 10

GRI performance indicators - (Economic, social and Enviromental performance categories) 5 10

The externalities created by business organisations (Definition, Positive (benefits) or Negative (cost), qualitatives terms) 5 10

5 11-12

The importance of climate change and its relevance to CSR reporting (Carbon tax scheme) 5 13

Alternative perceptions about the responsibilities of organisations ( Organisations responsabilities/Accountabilities) 5 13-14

Milton Friedman on the role of business (shs focus - not strong advocate for Social and envirponemental reporting)) 5 14

5 14

5 15

Definition (Freeman 1984) of stakeholders, BHP, Toyota and Amcor focus on Accountability) 5 15

5 15

5 16

Motivations for embracing CSR reporting (Accountability to Stakeholders or economic focused to protect Shs value) 5 17-18

5 19

5 19

Drivers towards better CSR (BCA) "(Doing right thing" BCA is based in Managerial Reasosining rather than ethical) 5 20

Motivations for disclosing social and environment information in CSR (Deegan 2009) 5 21

5 22

5 22

Gray, Owen and Maunders (1987) - (Powerful & Influence Stakeholders in order to get support and Approval) 5 23

5 24

(Managers have a fiduciary duty to all stakeholdersrather than just Shs) 5 24

Organisational legitimacy (highly motivation for corporations to provide CSR information) 5 25

Legitimacy theory ( Community perceptions - disclousres in order to survive - non to demostrate Accountability) 5 25

The social contract (Organisations to meet requirements of both legitmacy and relevance-Schocker&Setti) 5 26

Methods to legitimise its activities (Dowling & Pfeffer 1975) 5 27

5 28

5 29-30

Other incentives tied to maximising the value of the organisation (WBC - Environmental issues ans Financial positions) 5 31

Preferential capital flow (Investments portfolis - VicSuper Sustainability report) 5 31

Brand and reputation (Social and Environmental performance - remedial actions to rebuild lost legitimacy (Islam &Deegan) 5 32

Risk management incentives(Direct&Indirect Costs, Reducing risk - climate change for transparent reporting) 5 32

5 33

5 34

Cannot answer questions related to SocIAL AND Enviromental Performance) 5 34

5 34

Enviromental Resources (Externalities(Benefits/Cost) not controlled by Entity - not considered Assets of the Entity) 5 34-35

5 36

The Stern review on the Economics of climate changes (Value of the cost of climate change overstimated) 5 36

Issues of 'reliable measurement' and 'probability' (JI and Deegan - Laibilites & Provsions realted to Externalitites difficult to measure) 5 37-38

39

5 39

5 40

Requirements embodied within the Corporations Act and accounting standards 5 40-41

Corporation Act :Directors to Provide financial details of Environmtnal performance) 5 41

Corporations act section 299 (1)(f) on environmental performance / Asic require entities to disclose financial/non financial) 5 41

5 41

AASB 137 Provisions, contigent liabilities and contigent assets -Uncertain(Entities no quantify externaliites, non measureable/reliable) 5 41

5 41

5 41-42

5 42

National Pollutant Inventory (NPI) - Howes 2001 - NPI compel's business to release information 5 43-44

Energy Efficiency Opportunities Act 2005 - required to undertake detailed energy assessment to identify oportunitites) 5 45

Other legislations aimed at motivating improvements in Social and Environmental performance) 5 45

Australia: Independent pricing and regualtion tribunal, NSW ENErgy Saving Scheme, Commonwealth Renewablwe Energy target Scheme) 5 45

European Union Emmisions Trading Scheme (Creation of Emmisions allowances) 5 46

5 47

The global reporting initiative (GRI) - G3 Guidelines, Sectors Suplements, Protocols, National Annexures) 5 47

47

5 48

5 48

5 48-49

5 50

Carbon disclosure project (Carbon emission and climate change represent significant business risk - Investment decision) 5 50

5 51

Equator Principles (determine, assess ans manage Social and Environmental risk in project financing) 5 52

5 53

Trucost (Help to identify high -risk sectors for investments / cash flows - meet environemntal reporting requirments) 5 54

5 55

Social audits and their relationship to CSR reporting (Elkington -Definintion: Assess performance in realtion to Society requirements and expectations) 5 56

5 57-58

5 59-8

5 59

5 60

CSR The zone of acceptability (Identify leading edge / Reporting Sophisitcation) 5 60

ACCA sustainability reporting awards judging criteria (VicSuper, Fuji xerox, CPA Sustainability report - Positive attributes and recommendations) 5 63-65

Integrated Reporting: IIRC missions and objectives for an integrated reporting framework, roles of IIRC 64-65

International initiatives on climate change - Institutional Framework to reduce emmision(mitigation) and adapting toclimatechange(Adaption). - Kyoto Protocolo5 66

The Copenhagen accord (interim measure to address various aspects of climate change) 5 67-68

Climate change accounting techniques (Cap-and trade method for carbon emmision - designed as a market based aproach) 5 69-70

Financial accounting treatment for Cap and Trade scheme (Fixed price and Floating-price) 5 70-71

Accounting for the levels of actual emissions (3 Categories), NCOS -set up by Australian Governement; Genuine csrbon offset) 5 72

5 73

5 74

IFAC to define EMA, IN realtion to waste - Glad Stated, Deegan: prescrition in relation to creating more refine accounts of waste) 5 75-76

76

5 77

Accountable and Transparent, Stakeholders engagement to fulfill thwir environmental and Social responsabilities 78

ISO 14001 Environemntal Management System and ISO 26000 Guidance on Social responsibility 5 78

Sustainability performance and remuneration - Amcor Sustainability Report: core values/Performance indicators 79

Question 6 Explain how any assessment undertaken by management can affect the audience of the reports

Question 8 Enlightened self interest against Sustainbale development as a guiding principle

Question 18 Identify 5 corporate governance policies thatcould act to enhance an organisation's social and environmental performance.

Eco-balance (mass balance:Inflows-production process/outflows -finished products, organisattion to formulate measure to reduce

enviromental impact(recycled, waste products, waste and emissions)

Workshop

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Workshop

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Workshop

Level 2 –

Conventio

nal

(position &

role) 2.6

Aristotle -

Distribute

justice

Aristotle

Virtue

ethics 2.57

Bazerman

et al.

(2002)

Breach of

public

interest

due to

unconscio

us bias 2.16

Bedard

(2001),

Parker

(1994),

Canning &

O‟Dwyer

(2003)

A dual

purpose:

self-

interest

and public

interest 2.67

Collins

(2003)

and

Pierce &

Sweeny

(2004)

Stress in

the

workplace

2.65 –

2.66

Davenport

&

Dellaporta

s (2009)

Conflict of

interest

associate

d with

confidenti

ality 2.16

Dellaporta

s et al.

(2005)

Normative

theories:

“Should” 2.48

Dellaporta

s et al.

(2007)

Organizati

onal

culture 2.62

Dellportas

(2005)

Same as

above 2.11

Doucet

and

Ruland

(1994)

3 virtues

of

particular

relevance

for

accountan

ts 2.57

Hellier &

Bebbingto

n (2004)

Limitation

s of

principles-

based

approach 2.11

Herbert

Simon,

Guy

(1990)

„Satisficin

g‟:

Satisfacto

ry, less

than

optimal 2.7

Immanuel

Kant

Deontolog

ical

theories 2.53

Jeremy

Bentham

& John

Stuart Mill -

Utilitariani

sm

John

Rawls

(1971)

Justice

theory 2.55

Kohlberg

(1981)

Theory of

cognitive

moral

reasoning

and

developm

ent (3

levels, 6

stages) 2.58

Langende

rfer and

Rockness

(1990)

7 steps

ethical

decision-

making

adopted

by AAA 2.71

Mathison

(1988)

Philosophi

cal model

of ethical

decision-

making 2.55

Ponemon

and

Gabhart

(1993)

Circumsta

nces

pursue

the wrong

course of

action 2.6

Schein

(2004)

Relationsh

ip

between

ethical

behavior

and

culture

2.62 –

2.63

Schein

(2004)

Schein‟s

six

primary

mechanis

ms 2.64

Sim

(2000),

Sim and

Brinkman

n (2002,

2003) and

Dellaporta

s at el.

(2007)

Examine

the

relationshi

p between

leadership

and

culture in

Schein‟s

mechanis

ms 2.63

Tuller

(2000)

Accountin

g work

environme

nt 2.5

Willmott

(1990) &

Sikka

(1989)

„Public

Interest‟ 2.15

Teleologic

al theories 2.49

-

Egoism

(Ethical vs

psychologi

cal)

Right

theory 2.54

Level 1 –

Pre-

conventio

nal (self-

interest) 2.59

Level 3 –

Post-

conventio

nal

(society) 2.6

Level of

moral

reasoning

in

accountin

g 2.61

Ethics risk-

managem

ent

framework 2.65

Social

factors:

Laws,

regulation

s and

culture 2.67-2.69

The

AICPA

decision

tree

Reading

2.3

Accounting work environment 2.5

Hellier & Bebbington (2004)Limitations of principles-based approach2.11

Dellportas (2005)Same as above 2.11

Willmott (1990) & Sikka (1989)„Public Interest‟ 2.15

Davenport & Dellaportas (2009)Conflict of interest associated with confidentiality2.16

Bazerman et al. (2002)Breach of public interest due to unconscious bias2.16

Dellaportas et al. (2005)Normative theories: “Should” 2.48

Teleological theories 2.49

-

Egoism

(Ethical vs

psychologi

cal) 2.49

Jeremy Bentham & John Stuart Mill -

Utilitariani

sm 2.52

Immanuel KantDeontological theories 2.53

Right theory 2.54

John Rawls (1971)Justice theory 2.55

Aristotle -

Distribute

justice 2.55

Mathison (1988)Philosophical model of ethical decision-making2.55

Aristotle Virtue ethics 2.57

Doucet and Ruland (1994)3 virtues of particular relevance for accountants2.57

Kohlberg (1981)Theory of cognitive moral reasoning and development (3 levels, 6 stages)2.58

Level 1 – Pre-conventional (self-interest)2.59

Ponemon and Gabhart (1993)Circumstances pursue the wrong course of action2.6

Level 2 – Conventional (position & role)2.6

Level 3 – Post-conventional (society)2.6

Level of moral reasoning in accounting2.61

Dellaportas et al. (2007)Organizational culture 2.62

Schein (2004)Relationship between ethical behavior and culture

2.62 –

2.63

Sim (2000), Sim and Brinkmann (2002, 2003) and Dellaportas at el. (2007)Examine the relationship between leadership and culture in Schein‟s mechanisms2.63

Schein (2004)Schein‟s six primary mechanisms2.64

Ethics risk-management framework2.65

Collins (2003) and Pierce & Sweeny (2004)Stress in the workplace

2.65 –

2.66

Bedard (2001), Parker (1994), Canning & O‟Dwyer (2003)A dual purpose: self-interest and public interest2.67

Social factors: Laws, regulations and culture2.67-2.69

Herbert Simon, Guy (1990)„Satisficing‟: Satisfactory, less than optimal2.7

Langenderfer and Rockness (1990)7 steps ethical decision-making adopted by AAA2.71

The AICPA decision tree

Reading

2.3

Annual Report of FRC (2010)

IFAC (2003)

Module 2

Tuller (2000)

Hellier & Bebbington (2004)

Dellportas (2005)

Willmott (1990) & Sikka (1989)

Davenport & Dellaportas (2009)

Bazerman et al. (2002)

Dellaportas et al. (2005)

Jeremy Bentham & John Stuart Mill

Immanuel Kant

John Rawls (1971)

Aristotle

Mathison (1988)

Aristotle

Doucet and Ruland (1994)

Kohlberg (1981)

Ponemon and Gabhart (1993)

Dellaportas et al. (2007)

Schein (2004)

Sim (2000), Sim and Brinkmann (2002, 2003) and Dellaportas at el. (2007)

Schein (2004)

Collins (2003) and Pierce & Sweeny (2004)

Bedard (2001), Parker (1994), Canning & O‟Dwyer (2003)

Herbert Simon, Guy (1990)

Langenderfer and Rockness (1990)

Module 3

APEC (2008)

Bosch (1995)

Hampel report (CCG 1998)

CalPERS (2011)

Calbury Report (UK)

Bosch (1995)

Roger CJ (AWA Ltd v. Daniels (1992))

OECD (2004)

ASX (2010)

Sarbanes-Oxley Act

Percy (1995) & Bosch (1995)

AASB (2001)

COSO‟s Internal Control – Integrated Framework

Kaplan and Norton (1992)

PAIB (2004), CIMA

ASIC (2006)

Milton Friedman

Fraudulent Financial Report (1987-97)

Sarbanes-Oxley Act (2002)

Business Round Table (1997,2002, 2005)

Ramsay Report (2002)

Corporate Law Economic Reform Program Act (2004)

Harris (1997)

Uhrig (2003)

OECD Principles of Corporate Governance (2004)

UK Financial Reporting Council Corporate Governance Code

ASX Corporate Governance Code and Recommendations

UK Stewardship Code (FRC 2010b)

The Blue Book (IFSA 2009)

Nestor & Thompson (2000)

Soros (1998)

La Porta, Lopez-de-Silanes & Schleifer (1999)

Weil, Gotshal & Manges (2002)

IMF, WB, ADB

Yasui (1999)

IFAC (PAIB 2004)

Module 4

Edward Freeman (1984)

Monks & Minow (2008)

Denning LJ (1957)

Corporation Act (2001)

Jensen and Meckling (1976)

Malaysian Companies Act (1965)

Jensen and Meckling (1976)

OSHA (2010)

Sarbanes-Oxley Act (2002), Corporation Act (2001)

Fels (1999)

HSBC (2009)

Module 5

The Social Responsibility of Corporations (2006), Commission of European Communities (2001)

Grey, Owen and Maunders (1987)

Grey, Owen and Adams (1996)

Sustainability Reporting Guidelines (GRI 2006)

1

2

3

5.8

5.9

5.9

Bebbington and Gray (1992, 1997)

Woolworths Ltd (2009)

Milton Friedman (1962)

Mathews (1993)

Merrick Dodd

Adolf Berle

Brundtland (1987)

Parliamentary Joint Committee on Corporations and Financial Services (PJCCFS 2006)

BCA (2005)

Deegan (2009)

Gray, Owen, Adams (1996)

Deegan (2009)

Dowling & Pfeffer (1975)

Lindblom (1994)

Patten (1992)

Deegan and Rankin (1996), Deegan, Rankin & Tobin (2002), Islam and Deegan (2010)

World Business Council (WBC)

VicSuper (2004)

Lawlor (2002); Islam & Deegan (2008)

Mansley (2002)

Perks (1993)

Ji and Deegan (2011)

Yankelovich (1972)

1

2

a.

3

4

5

6

5.4

5.41

5.42

5.43

5.44

5.45

5.46

GRI (2010)

CDP (2009)

AccountAbility (2007)

EPs (2006a)

GHG Protocol

Trucost (2010)

Eco-Balance

The Body Shop (2007), Elkington (1997)

SA8000 (SAI 2008)

VicSuper and Fuji Xerox‟s Sustainability Report (2009)

CPA Australia Sustainable Report (2010)

IIRC (2010)

Deegan (2003)

ISO 14000, ISO 14001, ISO 26000, ISO 9001

Index

Beard (1994)

Friedman and Lyne (2001)

Dimnik and Felton (2006)

Smith and Briggs (1999)

Albrecht and Sack (2000)

Coate et al. (2003)

Jeacle (2008)

Biddle (2006)

Macquarie Dictionary

American Accounting Association (AAA)

CPA Australia

Lonergan (2009, p.24)

Parker et al. (1989)

Miller‟s (1994)

Carnegie and Napier (1996)

Blanthorne et al. (2005)

IFAC (2005)

IFAC (2010)

APESB (2010)

Bertrand Russell (1955)

Macquarie Dictionary

Oxford Dictionary

Carnegie (2009)

OECD (2004)

IFAC (2004)

Greenwood (1957)

Carey (1969), Buckley & Buckley (1974)

Wilensky (1964)

Buckley (1978)

Becker (1982)

Schon (1983)

West (2003)

Allan (2006)

West (2003)

Larson (1977)

Abbott (1988)

Lee (1995)

Saravanamuthu (2004) & Kelly (1985)

Robson and Cooper (1990) & Willmott

Lehman (2006)

Carnegie and Napier (2010)

Brewster (2003)

Chambers (1973)

Green (1991) & Clarke (2003)

he Australian & Murdoch (2010)

Sikka (2009)

Annual Report of FRC (2010)

IFAC (2003)

Module 2

Tuller (2000)

Hellier & Bebbington (2004)

Dellportas (2005)

Willmott (1990) & Sikka (1989)

Davenport & Dellaportas (2009)

Bazerman et al. (2002)

Dellaportas et al. (2005)

Jeremy Bentham & John Stuart Mill

Immanuel Kant

John Rawls (1971)

Aristotle

Mathison (1988)

Aristotle

Doucet and Ruland (1994)

Kohlberg (1981)

Ponemon and Gabhart (1993)

Dellaportas et al. (2007)

Schein (2004)

Sim (2000), Sim and Brinkmann (2002, 2003) and Dellaportas at el. (2007)

Schein (2004)

Collins (2003) and Pierce & Sweeny (2004)

Bedard (2001), Parker (1994), Canning & O‟Dwyer (2003)

Herbert Simon, Guy (1990)

Langenderfer and Rockness (1990)

Module 3

APEC (2008)

Bosch (1995)

Hampel report (CCG 1998)

CalPERS (2011)

Calbury Report (UK)

Bosch (1995)

Roger CJ (AWA Ltd v. Daniels (1992))

OECD (2004)

ASX (2010)

Sarbanes-Oxley Act

Percy (1995) & Bosch (1995)

AASB (2001)

COSO‟s Internal Control – Integrated Framework

Kaplan and Norton (1992)

PAIB (2004), CIMA

ASIC (2006)

Milton Friedman

Fraudulent Financial Report (1987-97)

Sarbanes-Oxley Act (2002)

Business Round Table (1997,2002, 2005)

Ramsay Report (2002)

Corporate Law Economic Reform Program Act (2004)

Harris (1997)

Uhrig (2003)

OECD Principles of Corporate Governance (2004)

UK Financial Reporting Council Corporate Governance Code

ASX Corporate Governance Code and Recommendations

UK Stewardship Code (FRC 2010b)

The Blue Book (IFSA 2009)

Nestor & Thompson (2000)

Soros (1998)

La Porta, Lopez-de-Silanes & Schleifer (1999)

Weil, Gotshal & Manges (2002)

IMF, WB, ADB

Yasui (1999)

IFAC (PAIB 2004)

Module 4

Edward Freeman (1984)

Monks & Minow (2008)

Denning LJ (1957)

Corporation Act (2001)

Jensen and Meckling (1976)

Malaysian Companies Act (1965)

Jensen and Meckling (1976)

OSHA (2010)

Sarbanes-Oxley Act (2002), Corporation Act (2001)

Fels (1999)

HSBC (2009)

Module 5

The Social Responsibility of Corporations (2006), Commission of European Communities (2001)

Grey, Owen and Maunders (1987)

Grey, Owen and Adams (1996)

Sustainability Reporting Guidelines (GRI 2006)

1

2

3

5.8

5.9

5.9

Bebbington and Gray (1992, 1997)

Woolworths Ltd (2009)

Milton Friedman (1962)

Mathews (1993)

Merrick Dodd

Adolf Berle

Brundtland (1987)

Parliamentary Joint Committee on Corporations and Financial Services (PJCCFS 2006)

BCA (2005)

Deegan (2009)

Gray, Owen, Adams (1996)

Deegan (2009)

Dowling & Pfeffer (1975)

Lindblom (1994)

Patten (1992)

Deegan and Rankin (1996), Deegan, Rankin & Tobin (2002), Islam and Deegan (2010)

World Business Council (WBC)

VicSuper (2004)

Lawlor (2002); Islam & Deegan (2008)

Mansley (2002)

Perks (1993)

Ji and Deegan (2011)

Yankelovich (1972)

1

2

a.

3

4

5

6

5.4

5.41

5.42

5.43

5.44

5.45

5.46

GRI (2010)

CDP (2009)

AccountAbility (2007)

EPs (2006a)

GHG Protocol

Trucost (2010)

Eco-Balance

The Body Shop (2007), Elkington (1997)

SA8000 (SAI 2008)

VicSuper and Fuji Xerox‟s Sustainability Report (2009)

CPA Australia Sustainable Report (2010)

IIRC (2010)

Deegan (2003)

ISO 14000, ISO 14001, ISO 26000, ISO 9001

Topics

Accounting Stereotypes

Accounting Stereotypes (Bean counter)

Accounting Stereotypes (5)

Accounting Stereotypes observation

Accounting Stereotypes: Scorekeepers

Accounting Stereotypes

Accounting Stereotypes: Colourful Accountant

Value Creation

Accounting Definition

Accounting Definition

Accounting Definition & “Service Ideal”

Accounting: Social Impacts

Accounting: Social Impacts: Theoretical Analysis

Accounting: Wider Social Impacts

Accounting: Social Intermediary

Technical, Soft Skills: Career Perspectives

Professional Accountants in Business

Accounting: SMEs

Professional Ethics

Situational Ethics

„Govern‟ Definition

„Govern‟ and „Governance‟ Definition

Governance

Governance

„Enterprise Governance‟

Key attributes of a profession

Key attributes of a profession

„Service ideal‟

Public Interest

Professional judgment argument

Professionals

„Regulatory fiat‟: importance of professionals

Comments on HIH, and Arthur Andersen

Evolution of accounting profession

Professionalisation

Comments on Larson‟s theory & power literature

Self-interest of accountants

„Gold collarism‟: knowledge worker

Relationship between accounting & social

Quantify the above relationship

Ideals of professionalism &deprofessionalisation

Loss of trust in the accounting profession

Lack of action to put its affair in order

Many accounting issues from 80s is unsolved

Failures by accountants

Views on the nature of basic auditing model

Requirements on independence of auditors

Rebuilding public confidence on Financial Report

Accounting work environment

Limitations of principles-based approach

Same as above

„Public Interest‟

Conflict of interest associated with confidentiality

Breach of public interest due to unconscious bias

Normative theories: “Should”

Teleological theories

-

-

Deontological theories

Right theory

Justice theory

-

Philosophical model of ethical decision-making

Virtue ethics

3 virtues of particular relevance for accountants

Theory of cognitive moral reasoning and development (3 levels, 6 stages)

Level 1 – Pre-conventional (self-interest)

Circumstances pursue the wrong course of action

Level 2 – Conventional (position & role)

Level 3 – Post-conventional (society)

Level of moral reasoning in accounting

Organizational culture

Relationship between ethical behavior and culture

Examine the relationship between leadership and culture in Schein‟s mechanisms

Schein‟s six primary mechanisms

Ethics risk-management framework

Stress in the workplace

A dual purpose: self-interest and public interest

Social factors: Laws, regulations and culture

„Satisficing‟: Satisfactory, less than optimal

7 steps ethical decision-making adopted by AAA

The AICPA decision tree

Key factors driving the needs for better corporate governance internationally

Value of corporate governance in APEC

Rights and obligations of shareholders

Issues arise for institutional shareholders

Views on corporate governance

BoD should have schedule reserved for decisions

Board functions

Conclusions on the role of the boards

Board chair (chairman) and role of CEO

Independent vs Non-independent directors

Structure of remuneration committees

Responsibilities of audit committees

Roles of audit committees

Objectives of audit committees

Benefits of audit committees

Limitations of audit committees

5 interrelated components to mitigate the risks and to achieve the organization‟s objectives

The Balanced Scorecard

Strategic Scorecards

Economic Value Added (EVA)

Traits of a sound regulatory system

Shareholder‟s wealth maximization

Findings on fraudulent reporting by the SEC

Guidelines for financial reporting

Statement on corporate governance

Requirements of independence of auditors

Audit reform and corporate disclosures

Summary of reports on corporate governance

Guiding principles for more effective boards

Opportunities for improvements in corporate governance in public sectors

6 core principles

8 core principles

Codes for institutional investors

Effective guidances for investment managers

Market-based systems

Characteristics of market-based systems

Reasons for market collapse

Relationship-based systems – European

Long-term stable relationships between group of insiders and the company

Different political, legal, regulatory structures

Relationship-based systems – Asian

Reform of corporate governance

Japan

Family-controlled companies and business networks

Common failure factors

„Stakeholder theory‟

Other issues arises from stakeholder theory

Why we need to understand agency theory

Who „run‟ the corporation

Obligations of the „officer‟

Define agency and central problem

Delegation of power of BoD

Assumptions underlying agency theory

„Whistleblower‟ protection

Whistleblower provision

International competition legislation and regulators

Abuse of market power (eg. Predatory pricing)

Mergers and Acquisitions

Cartel conducts (Output restrictions, allocating customers & suppliers or territories, Bid-rigging, Price-fixing)

Unilateral restrictions on supply (exclusive dealing)

Resale price maintenance

Compliance program

Consumer protection legislation

Puffery: „misleading‟ in advertising

Unconscionable conduct

HSBC‟s supplier code of conduct

Insider‟s trading

Types of corporations

Board structures and directors‟ responsibilities

Corporate Social Responsibility (CSR) definitions

Accountability: concepts and responsibilities

Provide an “account” of its social and environmental performance

Guidelines on reporting:

Social reporting

Environmental reporting

Sustainability reporting

Externality and implications for reporting

„Sustainable Cost‟

Climate change and CSR reporting

„Social responsibility‟

Conditions for existence of organization by communities

„Social contract‟ perspective

Shareholder primacy perspective

„Should not compromise the ability of future generations to satisfy their own needs‟

„Enlightened self-interest‟

Drivers towards greater CSR

Motivations for disclosing social and environmental information in CSR report

Stakeholder theory – Managerial branch

Stakeholder theory – Ethical branch

Legitimacy theory

Methods to legitimize its activities

Courses of action to obtain, maintain, or repair legitimacy

Empirical evidence of legitimacy theory

Investigate the social and environmental disclosure to support the legitimacy theory

Environmental issues impacts on profitability

Long-term success link with environmental, social and economic performance

Brand and reputation

Risk management incentives: climate change

Limitations of traditional financial reporting

Present value vs. renewable energy

Issues of „reliable measurement‟ and „probability‟

„Measurement issue‟: 4 steps:

The entity assumption

Regulations for CSR reporting

Corporation Acts

National Greenhouse and Energy Reporting Act (NGER 2007)

NGER Threshold

National Pollutant Inventory (NPI)

Energy Efficiency Opportunities Act 2006

Other legislation

European Union Emissions Trading Scheme (ETS)

Sustainability Reporting Guidelines (2006)

Carbon Disclosure Project (CDP)

AccountAbility AA1000: helping „organizations become more accountable, responsible, and sustainable‟

Equator Principles: a voluntary set of standards for determining, assessing and managing social and environmental

Green House Gas Protocol (Kyoto Protocol): most widely used international accounting tools for quantifying green

Trucost: assisting organizations, investors, governments in understanding the environmental impacts of business

„Eco-balance‟ or „Mass-balance‟

„Social Audit‟

Requirements of audit of site performance

ACCA Sustainability Report Awards

Integrated Reporting

International initiatives on climate change

Environmental management accounting

14001 (Environmental management), 26000 (voluntary guidance standard), 9001 (quality management)

Content P.

1.6

1.6

1.6

1.6

1.6

1.6

1.7

1.7

1.8

1.8

1.9

1.1

1.11

1.11

1.12

1.14

1.16

1.19-1.22

1.25

1.26

1.27

1.27

1.27

1.28

1.28

1.32

1.32

1.33

1.33

1.36

1.36

1.37

1.38

1.38

1.39

1.39-1.40

1.4

1.4

1.41

1.41

1.41

1.42

1.42

1.43

1.43

1.43

1.44

1.45

2.5

2.11

2.11

2.15

2.16

2.16

2.48

2.49

Egoism (Ethical vs psychological) 2.49

Utilitarianism 2.52

2.53

2.54

2.55

Distribute justice 2.55

2.55

2.57

2.57

2.58

2.59

2.6

2.6

2.6

2.61

2.62

2.62 – 2.63

2.63

2.64

2.65

2.65 – 2.66

2.67

2.67-2.69

2.7

2.71

Reading 2.3

3.5

3.6

3.9

3.11

3.12

3.12

3.13

3.13

3.16

3.18

3.19

3.21

3.21

3.21

3.22

3.22

3.26

3.28

3.28

3.29

3.3

3.31

3.35

3.35 – 3.36

3.36

3.37

3.38

3.39

3.43

3.43 – 3.44

3.45-3.51

3.54-3.55

3.56-3.64

3.64-3.66

3.66-3.68

3.69

3.7

3.71

3.72

3.72

3.37

3.75

3.76

3.76 – 3.77

3.78

3.87

4.4

4.6

4.6

4.7

4.7

4.8

4.9

4.1

4.19, 4.23

4.24

4.32

4.33

4.34

4.35

4.37

4.37

4.41

4.44

4.45

4.46

4.49

4.52

4.6

4.61 – 4.70

5.6

5.7

5.8

5.1

5.12

5.13

5.14

5.14

5.16

5.16

5.17

5.19

5.2

5.21

5.22

5.24

5.25

5.26

5.27

5.29

5.29 – 5.30

5.31

5.32

5.32

5.33

5.33-5.36

5.36

5.37-5.38

5.39

5.39

5.48

5.5

5.51

5.52

5.53

5.54

5.55

5.57

5.59

5.62

5.63

5.65

5.66 – 5.73

5.74 – 5.76

5.78