CORPORATE GOVERNANCE

CORPORATE GOVERNANCE

1. System by which companies are Directed & controlled

   • IASB's Conceptual Framework
     • Purpose
       • Assist
         • Development future IFRS's
         • Standard Setters
         • Preparers of Financial Statements
         • Auditors form opinion of compliance
         • users interpret financial Statements
       • provide harmonisation
         • consistent approach to problems
     • Objective of Financial Reporting
       • Provide info of entity useful in decision making of
         • Investors
           • exisiting
           • Potential
         • Creditor
         • Lendors
         • To assess Stewarship
         • Economic Resources
         • claims against
         • changes
     • Underlying Assumptions
       • going Concern
       • Accruals
     • qualitative characteristics
       • Relevance
         • Nature
         • Materiality
       • Faithful representation
         • complete
         • Neutral
           • requires prudence
             • not overstated
             • both ways
             • not understated
         • accruate
       • enhancing
         • comparible
         • verifiable
         • Timely
         • understandable
         • cost effective
     • Elements of Financial Statements
       • Assets
         • economic resource controlled due to past events
       • liability
         • present obligation to transfer economic resource due to past event
       • equity
         • residual interest after asset - liabilities
       • income
         • +Asset - liability
           • Not equity
       • expense
         • -Asset + liabiltiy
           • Not equity
     • recognition of elements
       • recognition
         • relevant
         • faithful
         • Benefit exceeds cost
         • Criteria
           • element
           • probable economic benefit inflow or outflow
           • measured reliably
       • derecognition
         • change in asset/liability as result
         • faithfull post tranaction asset & liability
     • Measurement of elements
       • Basis
       • factors
       • Multiple Measurement
     • Concepts of capital & capital maintenance
     • Pros
       • allows standards to focus on individual areas
       • less conflict reduces external presure
       • Cohesive & consistent
         • avoid piecemeal approach
     • Cons
       • not clear framework = easier
       • user diversity may require variety of standards and concepts
       • singular concept may not suit all usere

2. Think Ethics