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

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FINANCIAL REPORTING AND ETHICS(e)Other assurance services, for example, involvement in the auditof a company, being in the same group, as either associate orsubsidiary company to other companies having other auditors.The terminologies used above are hereby explained, as follows:(a)(b)(c)(d)Principal Auditors – These are the auditors with responsibilityfor reporting on the audit of financial statements of an entity whenthose statements include financial information of one or morecomponents handled by other auditors.Other Auditors – These are auditors, other than the principalauditors, with responsibility for reporting on the financial situationof a component, which is included in the financial statementsaudited by the principal auditors. Other auditors include affiliatedfirms, whether using the same name or not, and, andcorrespondent firms, as well as unrelated auditors.Incoming Auditors – These are the auditors who are workingand reporting on the current period’s financial statements, nothaving audited and reported on those for the preceding period.Predecessor Auditors – These are the auditors who previouslyworked and reported on the financial statements of an entity andwho have been replaced by the incoming auditors.11.12 THE ROLE OF PROFESSIONAL ACCOUNTANTS ANTS AND AUDITORS INGOVERNANCE FRAMEWORKIn paragraph 6.5 of Chapter 6 of this study pack, the word ‘accountant’ wasdefined and explained. What is left is to briefly discuss who an auditor is. TheChambers Dictionary (2003) defines ‘auditor’ as “person or persons who is /are authorized to examine accounts.” In wider sense, an auditor is an examinerof:(a)(b)The records of a business or company so as to ascertain the level ofreliability of the information which they contain; andThe documents from which the records have been developed, in searchof validity;Using the platform of the information provided in (a) and (b) above, the auditorpainstakingly detects and prevents fraud, with emphasis on the latter.For statutory or external reporting(c)The financial statements (including the supporting and accompanyingdocuments such as cash flow statements, five-year financial summaryand statements of value-added), to establish their truthfulness andfairness.238
CORPORATE GOVERNANCEIn summary, accountants and auditors are like the two sides of thesame coin. The former prepares and keep the records and generateaccounts. The latter vouches the records as to accuracy and integrity.The auditors evaluate the correctness of the accounts prepared againstthe underlying records and whether or not they accord with thestipulations of the law and statements of accounting standards.11.13 THE ROLE OF ACCOUNTANTS ANTS AND AUDITORS IN GOVERNANCEFRAMEWORK AND SOCIETY, , INCLUDING AGENCY Y PROBLEMSCorruption and power are closely intertwined and are the masterminds orunderlying factors for corporate governance failures all over the globe. Manyindividuals and business outfits look up to accountants to prepare theirfinancial returns / tax, papers etc. There is the idea of trust which enters therelationships between the public and accountants in the circumstances. Theenergy giant in the United States of America, Enron, is a very notoriousexample where those at the top institutionalized fraudulent practices bycollapsing the wall of internal control mechanisms. Notwithstanding theunsavoury developments all over the world, the role of accountants andauditors include the following:(a)Accountants are the first set of gatekeepers. They should endure thatall financial transactions are at arms-length (that is, without showingfavour or familiarity so as to strengthen bargaining power), valid,captured and properly recorded in accordance with the prescriptions ofthe Companies and Allied Matters Act, Cap. C20, LFN 2004, statementsof accounting standards, international accounting standards, local andinternational pronouncements and the code of ethics.(b)(c)(d)According to Frank Harding: “Corruption – Rising to the Challenge,”IFAC, (May 1999), accountants and auditors hold strategic positions ofaccess to highly privileged and confidential information which shouldbe guarded scrupulously, without divulging them to third parties,except as a matter of duty in court proceedings or with the knowledgeand consent of their clients.Accountants and auditors should execute their functions withprofessionalism in such a way that they can react positively andpromptly to the indicators of fraud and other irregularities, and forwardreports to the highest levels of authority.Internal auditors are the watchdogs of organisations, resources becausethey are there year-round, unlike the statutory external auditors whovisit only once-in-awhile. The internal auditors are in a unique positionto influence management and the board on risk management,enforcement and review of internal control procedures and corporategovernance.239
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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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8PROFESSIONAL ETHICS8. 0 LEARNING O
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PROFESSIONAL ETHICSobjectivity are
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PROFESSIONAL ETHICS(c)(d)The type o
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PROFESSIONAL ETHICSabout conflicts
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PROFESSIONAL ETHICS(d)(e)Confidenti
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PROFESSIONAL ETHICSA. III onlyB. II
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9DECISION MAKING IN ETHICS9. 0 LEAR
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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 195 and 196: ETHICAL THREATS AND SAFEGUARDSto th
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Page 201 and 202: ETHICAL THREATS AND SAFEGUARDSimmin
Page 203 and 204: ETHICAL THREATS AND SAFEGUARDSHowev
Page 205 and 206: ETHICAL THREATS AND SAFEGUARDS(iii)
Page 207 and 208: 11CORPORATE GOVERNANCE11.0 LEARNING
Page 209 and 210: CORPORATE GOVERNANCE11.3.1 Nature(a
Page 211 and 212: CORPORATE GOVERNANCEThe company sho
Page 213 and 214: CORPORATE GOVERNANCEtrust, possible
Page 215 and 216: CORPORATE GOVERNANCEAn agent has im
Page 217 and 218: CORPORATE GOVERNANCE(a)(b)(c)(d)(e)
Page 219 and 220: CORPORATE GOVERNANCE11.6.1 The law
Page 221 and 222: CORPORATE GOVERNANCEILLUSTRAUSTRATI
Page 223 and 224: CORPORATE GOVERNANCEimitated. They
Page 225 and 226: CORPORATE GOVERNANCE(a)(b)Greenbury
Page 227 and 228: CORPORATE GOVERNANCE11.9.2 Boards d
Page 229 and 230: CORPORATE GOVERNANCErelationship wi
Page 231 and 232: CORPORATE GOVERNANCE(e)(f)(g)(h)(i)
Page 233 and 234: CORPORATE GOVERNANCE(vi)Inquisitive
Page 235 and 236: CORPORATE GOVERNANCE(e)ConsultancyA
Page 237: CORPORATE GOVERNANCEThe incoming au
Page 241 and 242: CORPORATE GOVERNANCEAccording to Th
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Page 245 and 246: 12SOCIAL AND ENVIRONMENTALISSUES IN
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Page 269 and 270: APPENDIX IICOMPREHENSIVE QUESTIONS
Page 271 and 272: COMPREHENSIVE QUESTIONS AND SUGGEST
Page 277 and 278: APPENDIX IIICASE STUDY 1Karsashi, a
Page 279 and 280: CASE STUDIES(iii)(iv)The floor sale
Page 281 and 282: CASE STUDIESShare price and dividen
Page 283 and 284: CASE STUDIESSUGGESTED SOLUTION(A) A
Page 285 and 286: CASE STUDY 3The following informati
Page 287 and 288: 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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