Why Andrew Has Breached Fiduciary And Statutory Duties When He Prepared And Signed Off On The Financial Reports

In order to prove the breach of section 184, the following rules and duties must have been violated. A director commits an offence if they are reckless or intentionally dishonest, and fail to exercise their powers and discharge their duties in good faith in the best interests of the corporation or for a proper purpose .As mentioned earlier Mr Palmer was reckless in decision making by waving loans and using the company assets for private benefits and the company suffered had to go in voluntary administration. The second offence that needs to the violation of section 184 is that when a director commits an offence if they use their position with intentional dishonesty or recklessly in order to directly or indirectly gain an advantage for themselves, or someone else, or cause detriment to the corporation. Mr Palmer acted as a shadow director and his nephew agreed with all the decisions the corporation made such as political donations and transferring funds to another firms owned by Mr Palmer that caused detriment to Queensland Nickel. The third offence is a person who obtains information because they are, or have been, a director of a corporation commits an offence if they use the information with intentional dishonesty or recklessly. As

Issue: Have the directors of the company breached their duties mainly related to the company’s insolvent trading.

This case established that an auditor could be sued by a primary beneficiary for damages from negligence. A primary beneficiary is a party that has a direct benefit from the audit. Non-privity parties could also sue for gross negligence. This increased the auditor’s legal exposure to third parties. The SEC of 1934 reflected these changes and many others; one significant change was that auditor’s had a much higher litigation risk due to their new responsibility to third parties.

Equitable principles for directors were developed from fiduciary duties applied to trustees through common law. A director has a fiduciary duty to ensure that no conflict of interest exists between him and the company. This common law principle “the no conflict rule” was established in Keech v Sandford.7 Upholding this, Lord Cranworth LC held in Aberdeen Railway Co v Blaikie Bros,8 “And it is a rule….no one....shall be allowed to enter into engagements in which he has, or can have, a personal interest conflicting, or which possibly may conflict, with the interests of those whom he is bound to protect.” This principle was encompassed in the Companies Act 2006:

There is a conflict of interest involved between the two parties. As mentioned in the Business Corporation Act of Ontario which claims that every director and officer of a corporation within his powers act honestly and in good faith and must vote in best interest of the corporation. Also, the director should exercise the care, diligence and skill that a reasonable person would exercise in this situation.

The first matter that I will consider is that there is a real likelihood of a trust irregularity in the accounts of Howard Craven, as he would have fraudulently received monies from the Financier on behalf of Daniel. consider that I have no discretion as far as the expected trust irregularity is concerned and here I will disclose to the relevant authority, being the Law Society. I will explain to my client that I have no option in the matter.

S180(1) of the Corporations Act 2001 Commonwealth (hereinafter referred to as The Act) states that a “director or officer of a corporation must exercise their powers and discharge their duties with the degree of care and diligence that a reasonable person would exercise if they:

In this article, Mary Jo White, the chairwoman of the Securities and Exchange Commission, emphasized their crucial duty to protect shareholders from abusive practices they oversee. A good corporate governance and rigorous compliance are essential. However, ‘ethics and honesty’’ can become core corporate values when directors and senior executives embrace them. A recent academic study suggests that lax oversight can result when a director of a company is friendly with the chief executive overseeing it.

Analyse whether the directors have breached their duties. Your answer should include reference to relevant cases and sections.

B) Analyse the conflicts of interest that have been illustrated by the CBA financial planning scandal and the obligations of financial planners and CBA management in relation to conflicts of interest

under the Sarban Oxley act, companies are essential to achieve a fraud risk assessment and assess related controls. This in general involves identifying scenarios in which theft or loss could take place and influential if existing control procedures efficiently manage the risk to an satisfactory level. The risk that senior management might take priority over important financial controls to influence financial reporting is also a key area of focus in fraud risk assessment.

Problem: Sharon Michaels, who happened to be appointed as division controller for the company was concerned about the financial report of May, 2004, given to her by the plant accountant. The report indicated huge variance discrepancies between the budgeted profit ($91,200) and the actual outcome

We have already mentioned whether it is ethical for Tommy to reveal material facts to DEF by using the Kantian approach. We concluded that it is unethical for Johnnie to fire Tommy if he disclosed material facts that Johnnie’s wife being a majority shareholder to DEF. We are going to see whether Tommy should not disclose material facts to DEF when using the Utilitarian approach. The Utilitarian approach says “ends justify the means.” It believes that we do whatever necessary to accomplish the end result that fulfilled a multitude of people. For example, as the CEO, Chairman of the Boards, and the founder of ABC, it is ethical for

One of many duties of a director is set under s131 of the Company Act 1993. This section of the act let know that directors must act in good faith and in what the director believes is the best interest of the company. Traditionally, the word company foretold under this section have been regarded to devote solely to the company’s shareholders. However, this notion is seen as immoral. This is because according to the notion of corporate social responsibility, business must behave ethically, represents a broader recognition of stakeholders and must take into account economic, social and environmental inputs in the way it operates. Hence, people against the notion of shareholder primacy suggest that the director should also take into account the interest of a wide range of shareholders (e.g. customers, employees, the society as a whole) in order to be deemed as moral. This conflicting opinion raised the question, “To whom are the directors responsible?” This paper will explore a number of corporate governance practices (i.e. agency theory and stakeholder theory) that are related to this issue. It begins with the explanation of each theory and the discussion of ethical and societal concerns they put forward, followed by the advantage of shareholders and the disadvantage of other stakeholders regarding remedies of director’s breach of duty from a legal viewpoint and ends with a recommendation that would best reflect a good governance practice that is consistent with the corporate

A company prepares financial statement to provide information about its financial position and performance. This information is in turn used by a wide range of stakeholders (such as investors, banks, customers, suppliers etc) in making economic decisions with respect to respective economic interest in the company. Typically, in terms of ownership by investment in shares of the company, shareholders though own the company but do not manage it. Therefore, the shareholder and other such stakeholders to get comfort in taking sound decision need independent assurance from the auditors that the financial statements reflect true and fair view of the company affairs in all material respects. Hence, in order to enhance the level of