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FINANCIAL REPORTING AND ETHICSexpropriation by insiders (including management, family interests and /orgovernments).’’According to the Oxford Advanced Learner’s Dictionary of Current English, 7 thEdition, the word ‘expropriation’ can be defined as follows:(a)“Of a government or an authority to officially take away private propertyfrom its owner for public use;” and(b)(c)(d)(e)(f)(g)“Taking somebody’s property and using it without permission.”The sense of ‘expropriation’ adopted in this study pack is as volunteeredin (b) above, by the dictionary. Expropriation takes several and differentdimensions which include the following:Outright theft or wrongful conversion of assets. By way of example, themanaging director of a company has been caught with moving a biggenerator which was meant for use in the organisation’s guest house tohis private residence in town or country home;Engaging in transfer pricing of the goods manufactured, to a rivalbusiness owned by a powerful member of the board, at lower the cost ofproduction;Approving excessive executive compensation package which erodes thecash resources of the organisation and corruptly enriches topmanagement;Entrenchment of inept management team which lacks focus and runsthe corporate body ineffectively; andCommitting hard-earned resources on unproductive ventures whichbenefit only the privileged few.Shleifer and Vishny are of the opinion that corporate governance deals withthe ways suppliers of finance to corporations assure themselves of getting areturn on their investments. They make sure that managers do notmisappropriate the capital or invest in bad projects.” It has been observedthat in the Nigerian and other experiences, members of the board on their ownor working in concert with top management may be expropriating.Consequently, corporate governance is seen as “essentially about the preventionof theft”, which can take place craftily executed by either the management orboard or both of them.11.3 THE NATURE, SCOPE AND SIGNIFICANCE OF GOOD CORPORATE/ENTERPRISE GOVERNANCE AND THREATS TS / GOVERNANCE: GOODPRACTICE AND ISSUESHaving defined the concept and dynamics of corporate governance as inparagraph 11.2, it is appropriate to state as follows:208
CORPORATE GOVERNANCE11.3.1 Nature(a)(b)(c)(d)(e)(f)(g)It encompasses efficient and effective asset management inconsonance with the ambit of regulatory, compliance and riskmanagement principles;Good corporate governance evidences the commitment ofmanagement to adhere to conduct which is recognized as soundand appropriate all over the world;It promotes the commercial life and profitability of a firm;It fosters disaster recovery and ensures the going concerndisposition of a corporation;Good corporate governance ensures the compliance andenforcement of best practices;Good corporate governance embraces sound and enduringbusiness procedures, processes and policies. These mitigate risksand bring about optimal operational activities; andIt facilitates internal audit monitoring and evaluation of theinternal controls which are designed to mitigate all kinds of risks.11.3.2 ScopeCorporate governance as an overall concept covers the areas ofcompliance with the corporate and company law, code of best practicesand ethical norms, risk management so as to safeguard assets fromexpropriation and the installation and nourishment of internal auditfunctions in their helper and appraisal roles.11.3.3 SignificanceThe question could be asked: “Why should there be corporate governance?”A few points of illustration to the poser is as follows:(a)(b)(c)(d)The principal consideration is to justify its existence, by beingable to produce quality goods or supply efficient and economicservices, at the least possible costs;Good governance is the system by which corporations aremanaged. It means the obligation to ensure appropriate andadequate controls over a corporation’s operations so as to achievethe key objectives set in an ever changing environment;It is a scientifically outlined way of generating a competitiveand reasonable return on investment for the shareholders; andThe collapse of big corporate entities such as Enron in the UnitedStates of America and others such as Polly Peck and MaxwellCommunications in the United Kingdom had been attributed tothe large scale fraud perpetrated by their directors and auditors.The clamour, therefore, for the institution of corporate governance hasbeen motivated by the expectation that it will result in companies being209
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FINANCIAL REPORTING AND ETHICS1.3.3
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ACCOUNTING AND REPORTING POLICIESsu
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ACCOUNTING AND REPORTING POLICIES(j
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ACCOUNTING AND REPORTING POLICIES(i
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ACCOUNTING AND REPORTING POLICIES2.
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3AMALGAMATION, ABSORPTION ANDRECONS
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AMALGAMATION, ABSORPTION AND RECONS
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4ANALYSIS AND INTERPRETATION TION O
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ANALYSIS AND INTERPRETATION OF FINA
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5ACCOUNTING STANDARDS5.0 LEARNING O
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ACCOUNTING STANDARDS(i)(ii)(iii)(iv
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ACCOUNTING STANDARDSThere is no SAS
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ACCOUNTING STANDARDS5.2.4 Borrowing
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ACCOUNTING STANDARDS(iii)Certain pe
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ACCOUNTING STANDARDSby venture capi
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ACCOUNTING STANDARDSIFRS 7 Financia
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ACCOUNTING STANDARDSactivity, non-c
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ACCOUNTING STANDARDSin the year inc
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ACCOUNTING STANDARDS(v)(vi)(vii)whe
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ACCOUNTING STANDARDS(v)Actions requ
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ACCOUNTING STANDARDSAccounting stud
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6ETHICAL FRAMEWORK, CONCEPTSAND VAL
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ETHICAL FRAMEWORK, CONCEPTS AND VAL
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7THE ENVIRONMENT: CORPORATE,PROFESS
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THE ENVIRONMENT: CORPORATE, PROFESS
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Page 177 and 178: PROFESSIONAL ETHICSabout conflicts
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Page 181 and 182: PROFESSIONAL ETHICSA. III onlyB. II
Page 183 and 184: 9DECISION MAKING IN ETHICS9. 0 LEAR
Page 185 and 186: DECISION MAKING IN ETHICS9.2 A FRAM
Page 187 and 188: ETHICAL THREATS AND SAFEGUARDS(d)We
Page 189 and 190: DECISION MAKING IN ETHICS4. A perso
Page 191 and 192: 10ETHICAL THREATS TS AND SAFEGUARDS
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Page 225 and 226: CORPORATE GOVERNANCE(a)(b)Greenbury
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Page 229 and 230: CORPORATE GOVERNANCErelationship wi
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Page 233 and 234: CORPORATE GOVERNANCE(vi)Inquisitive
Page 235 and 236: CORPORATE GOVERNANCE(e)ConsultancyA
Page 237 and 238: CORPORATE GOVERNANCEThe incoming au
Page 239 and 240: CORPORATE GOVERNANCEIn summary, acc
Page 241 and 242: CORPORATE GOVERNANCEAccording to Th
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Page 245 and 246: 12SOCIAL AND ENVIRONMENTALISSUES IN
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SOCIAL AND ENVIRONMENTAL ISSUES IN
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SOCIAL AND ENVIRONMENTAL ISSUES IN
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APPENDIX ISUGGESTED SOLUTIONS TO RE
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SUGGESTED SOLUTIONS TO REVISION QUE
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SUGGESTED SOLUTIONS TO REVISION QUE
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APPENDIX IICOMPREHENSIVE QUESTIONS
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COMPREHENSIVE QUESTIONS AND SUGGEST
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APPENDIX IIICASE STUDY 1Karsashi, a
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CASE STUDIES(iii)(iv)The floor sale
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CASE STUDIESShare price and dividen
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CASE STUDIESSUGGESTED SOLUTION(A) A
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CASE STUDY 3The following informati
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CASE STUDIESCASE STUDY 4Ologobojo i
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APPENDIX IVTable 1:SUMMARY OF INTER
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SUMMARY OF INTERNATIONAL ACCOUNTING
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APPENDIX VGLOSSARY OF TERMSAbsorpti
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GLOSSARY OF TERMSEthical Objectivis
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APPENDIX VIBIBLIOGRAPHYChambers Ham
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APPENDIX VIISTUDY AND EXAMINATION T
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STUDY AND EXAMINATION TECHNIQUES7.3
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INDEXAAbsorption, 17, 19, 39, 40, 4
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INDEXProfessional Behaviour, 136, 1
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