The Importance Of Corporate Governance

Corporate Governance - is the system which is used for the purpose of controlling and directing the companies. The structure and principles of corporate governance specifies the distribution of rights and responsibilities among different stakeholders of the organization (such as the Managers, Board of directors – either executive or non executive, suppliers, shareholders, financiers, government and other stakeholders). Corporate governance emphasizes on balancing the interest of company’s many stakeholders and it provides a mechanism through which the company’s objectives are set and the means of achieving those objectives through proper monitoring of policies and actions accordingly. (Okeahalam and Akinboade, 2003: 3,4)

Good Corporate Governance

The core functions of accounting activities are to track the company’s financial position and performance. These activities play an important role in determining whether the company is fulfilling its corporate governance policies or not. The role of accountants is to ensure that the controls and functions as related to the corporate governance are sufficient enough and are applied responsibly. Accountants also need to ensure that the rules, policies, procedures, processes, strategies and regulations of the company are in accordance with the corporate governance. As noted by Ponduri, Sailaja, and Begum (2014), the role of accounting is critical with regard to corporate governance since it is the accountants and auditors who are the primary pro¬viders of information to the capital market participants and its

Through accounting data a company can have an accurate picture of their overall financial position and can have a track of their income and expenditures. Accounting profession plays a huge role in helping the company’s operations to run smoothly on a ethical, legal and practical basis. This can become a strong foundation in company’s continued growth and success.

Accountants have become the rule checkers and the role of accounting profession is very critical to corporate governance and has now become the primary source of information to many stake holders of the company. Accountants should carry their tasks in a professional and ethical way as many investors rely on accounting reports. Company’s own critical decisions such as investment strategies depend heavily on accounting activities. Some of the key professional duties of accountants as related to corporate governance are:

- To restore investor confidence in key market

- To help eliminate financial statement fraud / misleading in public quoted companies

- To blow the whistle if fraudulent activities have come to the knowledge

It is the part of accountant’s duties to ensure that