Financial Reporting and Ethics - The Institute of Chartered ...

7THE ENVIRONMENT: CORPORATE,PROFESSIONAL AND REGULATORY7.0 LEARNING OBJECTIVESAfter studying this chapter, readers will be able to:! Evaluate the corporation and its interests as well as professional responsibilities;! Explain the concept, origin, problems of accountability and the roles of accountantsin the global context;! Describe the legal framework for businesses and accountants; and! Explain professional (statement of accounting standards) and legal requirementsin financial reporting and auditing.7.1 THE CORPORATION AND ITS INTERESTS AND PROFESSIONALRESPONSIBILITIES7.1.1 IntroductionA corporation is an association of natural persons brought together toconstitute an artificial legal person and is distinct from the human beingswho form its membership at any point in time. A corporation is not ahuman being. It has a common seal which enables the company orcorporation to identify its acts and be answerable for them.A corporation or company does not die, as it has no soul, unlike thevarious persons who set it up. It may live forever because it has perpetualsuccession. There are two forms of corporations. These are:(a)(b)Corporate Sole; andCorporate Aggregate.A corporate Sole is one which has only one single member at any pointin time. The ‘association’ is successive. Examples of corporate soles areperpetual offices such as Kingship and Bishopric.147