1. PRINCIPLES Principle 1: Ethical leadership and corporate citizenship Ethics (or integrity) is the foundation of, and reason for, corporate governance requires the board to ensure that the company is run ethically. (King III) 1.1 In order to operate ethically, the Board must lead by example in monitoring the affairs of the company. The Board must: a) assume responsibility for decisions taken in relation to the company; b) ensure that accountability is taken for all decisions taken; c) exercise fairness in their decision making; and d) ensure that the affairs of the company remain transparent and open for scrutiny management and all stakeholders. Principle 2: Role and responsibility of the Board The Board is responsible for corporate governance and has two main functions: first, it is responsible for determining the company‘s strategic direction (and, consequently, its ultimate performance); and second, it is responsible for the control of the company.
Senior Management is responsible for implementing Board committee’s decisions and approved by the Full board. As part of the control environment, for effective oversight and monitoring for regulated banks the Board Audit committee, Risk Committee is statutory (Deumes and Knechel, 2008). The above literature is insightful in highlighting the role of oversight audit committees but such committees may not be present in NGOs. The literature does not equally provide empirical evidence on the extent to which existence of audit committees influences financial performance in NGOs. This study will therefore strive to cover the raised knowledge
An important link that acts like an adhesive to a strong anti-fraud programme is timely internal communication. Companies should collect and share information regarding prevention, detection, investigation and remediation of fraud, corruption and misconduct, identified risks, strengths and weaknesses of anti-fraud control activities, allegations of misconduct and remediation efforts (PwC India, 2011). These are aided by current development in technology. Relevant business data is available and analyzed through common support tools to analyze the impacts of key business decisions and enhance decision making outcomes. Highly advanced technological and data analysis tool may be required to effectively achieve the fraud risk management goals of the entity.
According to Section 1 of the Auditing Profession Act, reportable irregularity is defined as, any unlawful act or omission committed by any person responsible for the management of a corporation, who has caused or likely to cause material financial loss of the entity or stakeholders, fraudulent of amounts to theft, represents a material breach of any fiduciary duty. (independent regularity board for auditors, 2015) Laws and regulations Ethics and business conduct plays a significant role in all professional corporations. In demonstrating the core values, the code of conduct aims to improve the transparency of business processes. The purpose of the code of conduct is to protect the corporation’s reputation in the event of a breach of conduct
These rules are an aid to interpreting the Principles into practical applications and are intended to guide the ethical conduct of internal auditors. 1. Integrity Internal auditors: 1.1 Shall perform their work with honesty, diligence and responsibility. 1.2 Shall observe the law and make disclosures expected by the law and the profession. 1.3 Shall not knowingly be a party to any illegal activity, or engage in acts that are discreditable to the profession of internal auditing or to the organisation.
According to Cahill (2006), highlights that internal control is “the system of internal administrative and financial checks and balances designed by management and supported by corrective actions to ensure that the goals and responsibilities of the organization are achieved.” Besides, Alan G. Hevesi (2005) as cited by Douglas (2011), also defined internal control as “the integration of the activities, plans, attitudes, policies, and efforts of the people of an organization working together to provide reasonable assurance that the organization will achieve its objectives and mission”. So, on the basis of above definitions, it is clear that internal control is a broad term with wide area of operation. It includes a number of methods and measures
What is corporate compliance? Compliance - The word compliance is defined as the act of adhering to or conforming to a law, rule, demand, or request. In a business environment, conforming to the laws, regulations, rules and policies is a very important part of business operations often referred to as "corporate compliance." Corporate compliance involves keeping a watchful eye on a fast-changing legal and regulatory climate, and making the changes necessary for the business to continue operating in good standing within its industry, community, and customer base. In a broader sense, corporate compliance extends beyond mere legal and regulatory conformity into the realm of promoting organizational ethics and corporate integrity.
While they do look at financial risk, they also look at strategic risk, fraud risk, and operational risk. Etc... Those types that are important to an organization. Strategic and operational decisions are made with respect to business practices and how organization is holding itself out there to its customers and to its business partners. The execution of company activities is not the responsibility of internal auditors. They direct management and the board of directors (BOD) or similar oversight body regarding a better execution of their responsibilities.
To ensure compliance with directive controls, a clear, consistent message from management that policies and procedures are important must permeate the organization. They provide evidence that a loss has occurred but do not prevent a loss from occurring. Examples of detective controls are reviews, analyses, variance analyses, reconciliation, physical inventories, and audits. However, detective controls play critical role providing evidence that the preventive controls are functioning and preventing losses. Control activities include approvals, authorizations, verifications, reconciliation, and reviews of performance, security of assets, segregation of duties, and controls over information systems.