Importance Of The SET Code Of Best Practice For Directors Of Listed Companies

The information in this report regarding the accounting standards for private companies is as stated in the proposal stage. The three options discussed are options being considered and the Accounting Standards Board (AcSB) has issued an

Corporate governance in itself has no single definition but common principles which it should follow. For example in 1994 the most agreed term for corporate governance was “the process of supervision and control intended to ensure that the company’s management acts in accordance with the interest of shareholders” (Parkinson, 1994)1. Corporate governance code is not a direct set of rules but a self-regulated framework which businesses choose to follow. This code has continued to change in the past 20 years in accordance with what is happening in the business world. For example the Enron scandal caused reform in corporate governance with the Higgs Report which corrected the issues which were necessary. Although it does not quickly fix problems, it gives a better framework to

This programme accentuates the enhancement of the CA (SA) professional by persistently developing the standards governing the CA (SA) profession. The programme also focuses on legal and corporate governance; which aim at aligning social and economical standards; secures that the CA (SA) profession is accountable and affiliated with the interest of individuals; corporations and the society (South African Institute of Chartered Accountants, 2014). These regulations also safeguard the use of the accounting standards, as will be inspected in the succeeding

In 1973 the Financial Accounting Standards Board (FASB) was established to set the financial accounting standards in the United States of America for nongovernmental entities. These standards are collectively called U.S. Generally accepted Accounting Principles, or U.S. GAAP. The Securities and Exchange Commission (SEC) and the American Institute of Certified Public Accountants acknowledge the authority of these standards (FASB, n.d). A “proven, independent due process” is used to collect the viewpoints of the financial statements prepares and users for the constant improvement of these standards. An Accounting Status Update(ASU) is not an authoritative source however documents the amendments to communicate the changes in the FASB Codification for a user to understand the reason and future of those changes (FASB, n.d).

In 1973, the Financial Accounting Standards Board (FASB) was created and their mission is “to establish and improve standards of financial accounting and reporting for the guidance and education of the public, including issuers, auditors, and users of financial information.” (FASB.org, 2009a). The FASB is a private, not-for-profit organization whose primary purpose is to develop generally accepted accounting principles (GAAP) within the United States. The Securities and Exchange Commission (SEC) designated the FASB as the organization responsible for setting accounting standards for public companies in the U.S. Therefore, the FASB plays a vital and important role in protecting the financial well being and the overall stability of our

The purpose of creating FASB is to establish standards of financial accounting that control the establishment of financial reports by nongovernmental organizations. This instance is identified as the number one authority by the SEC and the American Institute of Certified Public.FASB Accounting Standards Codification serves as a reference guide of authoritative standards for accounting and reporting, to be applied by nongovernmental organizations. Some examples are; ASC 830-230-55-1 that can identify as Statement of Cash Flows for Manufacturing Organization with Foreign Operations, ASC 926-330-35-1 can be justified as Products Held for Sale, ASC 954-440-25-2 identified as Continuing Care Retirement Community, ASC 505-20-50–1 means Equity, Stock Dividends and Stock Split and Disclosure, ASC 710-10-05-6 describe as Employees Compensations..

The code will direct all officers and employees while conducting company business to: obey all rules, regulations and laws, conduct themselves with honesty and integrity and to avoid all conflicts of interests with the company business, report to work in condition to work and be free from the influence of alcohol or drugs, respect the rights and deal fairly with all clients, keep honest and accurate records and reports of company information, respect the diversity of all and not engage in discrimination or harassment, preserve the confidentiality of all company information entrusted to them, maintain

Ethical decision making is absolutely essential if our company is to continue to grow and to maintain its standing in the business community. Ethical decision making is something that should not merely pertain to upper levels of management, but should apply to the company at all levels of its corporate hierarchy.

In May 2008, the AICPA’s Governing Council designated the International Accounting Standards Board (IASB) as the body authorized to establish international financial accounting and reporting principles under rule 202 and 203 of the AICPA Code of Professional Conduct. Below is an illustrative Independent Auditor’s Report on financial statements issued in conformity with IFRS.

The field of accounting is constantly evolving. This is true not only for the theory of accounting itself but also the entities that govern its theory and practice. Presently, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) are faced with some of the biggest challenges to date. To understand the significance of these two boards, it is necessary to understand their histories, relations between the boards, and the standards that they set. Also how the knowledge of these boards and the field they lead, gained through the masters of science in accountancy

One of the primary goals of the AICPA is to set and maintain professional accounting standards. These include setting the industry standards for ethics, auditing, tax practices, quality control and financial planning. However, the AICPA has stepped away from setting certain financial industry standards. For example, the AICPA originally set the generally accepted accounting principles (GAAP), but they relinquished control to the Financial Accounting Standards Board (FASB). In addition to this, the recently formed Public Company Accounting Oversight Board (PCAOB) now oversees financial audits of public companies, while the AICPA oversees private companies.

Board members duty is to guard the best interest of an organization. There are three laws in place that a board member must follow. First, the duty of care involves the board member carry out their managements responsibilities and comply with the law in the best interests of the corporation. Next, the duty of good faith requires board members to be faithful to organization mission and values. Lastly, the duty of loyalty requires a board member must give undivided commitment when making decisions affecting the organization. The Sarbanes -Oxley act was passed in 2002 by the U.S. government to protect investors from accounting scandals and fraud. Furthermore, the Sarbanes Act requires public companies to establish a code of conduct for top executives.

The FASB has the mission of create and improve the accounting standards and the financial reports by the nongovernmental organizations, offering useful information that allows investors and other users to make decisions. The implementation and improvement of the standards is made taking into consideration the opinion of all the parties interested and it is supervised by the Financial Accounting Foundation’s Board of Trustees. This process open to the public participation warranty the transparency into the standards-setting process. Therefore, the FASB issue a variety of reports requesting feedbacks on its standards setting activities. (FASB, Standard-setting process, n.d.)

For nonpublic companies auditing guidance are issued by the American Institute of Certified Public Accountants, AICPA. Prior to PCAOB, AICPA served as the primary governing body of public accounting profession. Since the roles have changed with PCAOB regarding the auditing standards for public companies, the AICPA is still developing standards for the nonpublic companies. The organization has developed four fundamental principles that govern an audit conducted in accordance with GAAP. The principles are:

It includes organization, values and the principle and guidelines for its business policies.The company sees corporate governance as a key condition to strengthen the relationship between stakeholders and shareholders which brings lasting corporate success.The company uses The German corporate governance code which contains recommendations and suggestions for good and responsible corporate management and supervision.The code was prepared by government commission established for the purpose of acceptance in both national and international corporate governance standards.The board of management and the supervisory board of the company base their work on the German Corporate Governance