Corporate Governance

2021 ◽  
pp. 32-48
Author(s):  
Marios Eugene Menexiadis
Keyword(s):  
Corporate Governance ◽  
Control Systems ◽  
Internal Control ◽  
Negative Impact ◽  
Effective Control ◽  
Control Mechanisms ◽  
The Impact

Corporate governance is the cornerstone for the organization, when it comes to effective internal control systems by modern organizations. Over the last 20 years, several business giants have collapsed under the weight of illegalities and frauds, such as Enron, WorldCom, Guinness, Maxwell Group, Barings Bank, etc. The impact of the failure of these organizations on the economies in which they were operating was particularly significant and had a negative impact on those directly or indirectly associated with them. The shareholders, as well as all stakeholders such as suppliers, customers, creditors, employees, and governments of the countries where the above organizations were active, were adversely affected. The failure of the organizations was attributed to the inadequacy of their boards and the lack of organized and effective control mechanisms by their management.

Board structure changes after accounting fraud: the case of Schneider Electric

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Benedicte Millet-Reyes ◽  
Nancy Uddin
Keyword(s):  
Corporate Governance ◽  
Internal Control ◽  
Multinational Corporation ◽  
Business Case ◽  
Annual Reports ◽  
Board Structure ◽  
Control Mechanisms ◽  
Accounting Fraud ◽  
Content Type ◽  
The Impact

Theoretical basis The impact of corporate governance on internal controls and quality of financial disclosures. Research methodology Analysis of a real financial fraud event for a non-US multinational corporation. The case relies on accessing and analyzing annual reports for the firm, both before and after the fraud. Additional information on industry governance characteristics are provided in the case itself so that students can compare the firm to the industry. Case overview/synopsis This business case is centered on the analysis of Schneider Electric, a French multinational corporation, which had to restate their financial statements in 2011 because of accounting fraud. Following this event, Schneider undertook major changes in their board structure to improve internal control mechanisms. This pedagogical business case familiarizes students with international differences in ownership and board structure and emphasizes potential corporate governance changes after financial statement fraud. Complexity academic level Managerial finance, corporate finance, international finance, auditing. This case is more appropriate for upper-level undergraduate and graduate courses.

scholarly journals Assessment of Government Internal Control Systems on Financial Reporting Quality in Ghana: A Case Study of Ghana Revenue Authority

2018 ◽  
Vol 10 (11) ◽  
pp. 40
Author(s):  
Wonder Agbenyo ◽  
Yuansheng Jiang ◽  
Prince Komla Cobblah
Keyword(s):  
Control Systems ◽  
Financial Reporting ◽  
Internal Control ◽  
Negative Impact ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Quality Reporting ◽  
The Impact

Internal control systems cannot be underestimated as it serves as the lifeblood of most institutions in terms of its imperative roles that it plays in both tangible and intangible assets of an organization. Internal control actions on quality financial report state positive goals more especially when all parties involved adhere to their duties; thus, making the quality of financial reporting comparable, understandable, relevant, and reliable. In this regard, this study investigated the impact of government internal control systems on financial reporting quality in Ghana using Ghana Revenue Authority as the case study. Specifically, the study examined the nature and quality of financial reporting and the impact of government internal control systems on financial reporting quality. Both quota and simple random sampling techniques were used to select fifty (50) persons as the sample size of the study. Questionnaires were used to obtain data. The correlation matrix was used to examine the relationship between government internal control systems and financial reporting quality. The study finds out that contrary to apriori expectation sign monitoring as an element of internal control system has a negative impact on the financial quality reporting but was however statistically significant. The study also revealed that with a unit increase in the collection performance, the financial reporting quality of GRA will improve. The study recommended that the government should ensure that the internal control systems are well monitored and regulated. 

(The relationship between the level of actual application of corporate governance principles and the efficiency of internal control systems)

2021 ◽  
Vol 26 ◽  
pp. 667-708
Keyword(s):  
Corporate Governance ◽  
Private Sector ◽  
Control Systems ◽  
Internal Control ◽  
Internal Audit ◽  
Actual Application ◽  
Efficiency And Effectiveness ◽  
Rules And Principles ◽  
The Impact ◽  
The Relationship

Today, corporate governance is one of the concepts that have increased in importance and need in various sectors of the business because of its role and a significant impact in the process of corporate governance and the resulting protection of shareholders' rights and other parties that have interests with the company, so the importance of internal audit in all its administrative and technical aspects as one of the tools Which contribute to the application of the principles and rules of governance, and to be able to accomplish oversight functions and auditing in a manner that achieves the objectives envisaged by the commitment to the rules and principles of disclosure and proper disclosure of decisions and policies and the extent of adherence to the rules and standards of governance and presentation of information This research aims to measure and demonstrate the impact of the relationship between the actual application of the principles of corporate governance and the efficiency and effectiveness of internal audit systems in the private sector companies. The private sector operating in Iraq were selected three banks from this sector in the province of Maysan to be a sample of research and prepared a questionnaire to collect data and analyzed statistically The most important results that resulted from this study is that there is an actual application of the principles of governance in a relatively The Corporate Governance Code increases the efficiency and effectiveness of the internal audit systems in the companies. Key words:- corporate governance , internal control systems

AGILITY AND THE ROLE OF PROJECT — INTERNAL CONTROL SYSTEMS FOR INNOVATION PROJECT PERFORMANCE

2019 ◽  
Vol 24 (07) ◽  
pp. 2050064 ◽  
Author(s):  
PHILIPP A. LILL ◽  
ANDREAS WALD ◽  
RONALD GLEICH
Keyword(s):  
Control Systems ◽  
Internal Control ◽  
Positive Impact ◽  
Belief Systems ◽  
Project Performance ◽  
Project Managers ◽  
Control Mechanisms ◽  
Innovation Project ◽  
The Impact ◽  
Project Level

As a reaction to the rapidly changing environment, organisations increasingly use agile project management (APM) methods to develop innovation. The associated process changes necessitate the adaption of organisational structures and control systems. This study draws on Simon’s Levers-of-Control framework (LOC) to explore the impact of different control levers on innovation project performance. Based on a survey of 316 project managers and product owners, the results suggest that the use of interactive project control systems and project-internal belief systems has a positive impact on the innovation outcome, regardless of the degree of agility of the project. Furthermore, we reveal that a strong project environment leads to increased use of control mechanisms on the project level and has a conducive impact on innovation project performance. The study is among the first to apply the LOC on the project level and integrate it into the agile context.

scholarly journals The Role of Internal Control in Firms’ Coping with the Impact of the COVID-19 Pandemic: Evidence from China

2021 ◽  
Vol 13 (11) ◽  
pp. 6294
Author(s):  
Peiqing Zhu ◽  
Jianbo Song
Keyword(s):  
Internal Control ◽  
Manufacturing Industry ◽  
Firm Heterogeneity ◽  
Negative Impact ◽  
Risk Prevention ◽  
High Tech ◽  
Obvious Effect ◽  
The Difference ◽  
The Impact

Internal control plays a role in risk prevention for firms when dealing with serious emergencies, which ensures the sustainable development of firms during a crisis. Based on the rapid outbreak of COVID-19 in China, this paper empirically tests whether internal control alleviates the negative impact of the pandemic on firm performance. Using a sample of Chinese listed firms from the first quarter of 2019 to the third quarter of 2020 and employing the difference-in-difference (DID) method, we find that the firms with a higher quality of internal control achieve better financial performance during the pandemic period; the more serious the pandemic is, the more obvious effect internal control plays. Furthermore, we consider the industry heterogeneity and firm heterogeneity of the risk resistance effect of internal control. In the manufacturing industry, which is a “disaster zone” of the pandemic, and the non-high-tech industry with a low degree of digitization, internal control can play a more important role in firms’ performance. Moreover, for state-owned enterprises, and firms with strong financing constraints, the role of internal control is more prominent. The above results provide empirical evidence for the risk prevention function of internal control and shed new light on the measures for firms to resist emergencies in the future.

scholarly journals The role and tasks of the internal audit and audit committee as bodies supporting effective corporate governance in insurance sector institutions in Poland

2012 ◽  
Vol 3 (4) ◽  
pp. 23-39 ◽  
Author(s):  
Elżbieta Izabela Szczepankiewicz
Keyword(s):  
Control Systems ◽  
Internal Control ◽  
Audit Committee ◽  
Economic Recession ◽  
Internal Audit ◽  
Financial Supervision ◽  
Insurance Sector ◽  
Internal Control System ◽  
The Impact ◽  
Effective Supervision

Faced with the risk of consecutive waves of financial crisis and economic recession, government committees, financial supervision authorities and financial institutions themselves – both in Poland and worldwide – have launched a number of measures to make the supervision of insurance sector institutions more effective, particularly in aspects related to efficient risk management and internal control. The article describes the impact of the amendment of laws and other regulations on the development of the present internal control systems in insurance sector institutions. It draws attention to the need for a new structure of the internal control system, and the role and purpose of the internal audit and the audit committee as the bodies supporting effective supervision in insurance undertakings and reinsurance undertakings.

scholarly journals The Impact Of Good Corporate Governance To Manufacturing Firm’s Profitability And Firm’s Value

2016 ◽  
Vol 5 (2) ◽  
pp. 181-196 ◽  
Author(s):  
Johanes Sumarno ◽  
Sendy Widjaja ◽  
Subandriah Subandriah
Keyword(s):  
Corporate Governance ◽  
Fixed Effects ◽  
Negative Impact ◽  
Stock Exchange ◽  
Manufacturing Firms ◽  
Fixed Effects Model ◽  
Good Corporate Governance ◽  
Oecd Principles ◽  
Equitable Treatment ◽  
The Impact

This paper studied the behavior of management toward the implementation of Good Corporate Governance in Indonesia to determine whether it has any influence towards profitability and its implication to the Manufacturing Firms’ value publicly listed in Indonesian Stock Exchange. There were 41 corporations who met the criteria of the survey. The data were analyzed using Panel Regression with fixed effects Model. The empirical findings show that the implementation of Corporate Governance in Indonesia has a positive, significant and direct impact toward firms’ profitability and firms’ value. Corporate Governance principles based on OECD principles that have positive and significant impact to both profitability and Firms’ Valueis Rights of Shareholders, Role of Stakeholders, Responsibilities of the Board Commissioners and Board of Directors. The principles that have significance and negative impact towards corporate profitability and value, are: Equitable treatment of shareholders and Disclosure and Transparencies. The most significant principle influencing profitability and firms’ value is Disclosure and Transparencies. Profitability plays a greater role in influencing Manufacturing Firms’ value in Indonesia. DOI: 10.15408/sjie.v5i2.3542

Governance Practices and CEO Hubris

2021 ◽  
pp. 161-182
Author(s):  
Paola Ferretti ◽  
Cristina Gonnella
Keyword(s):  
Decision Making ◽  
Corporate Governance ◽  
Internal Control ◽  
Financial Distress ◽  
Good Governance ◽  
Power Dynamics ◽  
Control Mechanisms ◽  
Managerial Entrenchment ◽  
Governance Practices

This chapter analyzes the connection between CEO hubris and corporate governance contingencies, including a case study of an Italian bank for which the state of financial distress shall be linkable also to bad governance. The main objective is to verify whether, in presence of hubristic CEO, the internal control mechanisms, set to ensure the board vigilance and limit the overconfidence of the leader, are implemented, and if so, whether such mechanisms, even when formally respected, may be not so appropriate to guarantee a good governance. Particularly, the existence of a CEO hubris could neutralize their positive expected balancing effects on the power dynamics between CEO and board, such as to give prevalence to substance over form. Therefore, it may occur that some governance mechanisms (e.g., independence, non-duality), even if formally implemented, are unable to stem the managerial entrenchment of the CEO, who succeeds in enhancing immoderately his substantial power in the decision-making process.

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