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P1 Governance, Risk & Ethics

Concept Checklist Questions
Khor Seng Cheong

P1 Governance, Risks & Ethics Concept Checklist Instruction: Draw a simple mindmap for the following questions
PART A GOVERNANCE AND RESPONSIBILITY

1. Explain the meaning of corporate governance. 2.Explain the key underpinning concepts of: fairness openness/transparency independence probity/honesty responsibility accountability reputation judgment integrity 3.Explain the: duties of directors functions of the board the principles of directors remuneration and rewards responsibility of the board for risk management systems and internal control the rights and responsibilities of shareholders, including institutional investors

4. Explain the roles of the the following internal parties involved in corporate governance. Directors Company secretaries Sub-board management Employee representatives (e.g. trade unions) 5. Explain the following roles of external parties involved in corporate governance. Shareholders Auditors Regulators Government Stock exchanges Institutional investor 6. Explain the key concepts in agency theory. Agents Principals Agency Agency costs Accountability Fiduciary responsibilities Stakeholders

7. Explain the following theories in respect of agency relationship. Transaction costs theory Stakeholder theory 8. Distinguish between unitary and two-tier board structures and the respective advantages and disadvantages.

9. Describe the characteristics of non-executive directors (NED). 10. Describe the purposes, roles and responsibilities of NEDs. 11. Compare the roles of the chief executive officer and company chairman. 12. Describe the importance of induction and continuing professional development of directors on boards of directors. 13. Explain how the performance of boards and individual directors (including NEDs) on boards being appraised. 14. Explain the role of the following committees in effective corporate governance: Remuneration committees Nominations committees Risk committees. Audit committees 15. Describe the general principles of remuneration of executive directors. 16. Describe and compare the essentials of rules and principles based approaches to corporate governance. 17. Describe the reasons behind the development and use of codes of corporate governance (acknowledging national differences and convergence). 18. Explain the main provisions of the Sarbanes-Oxley Act (2002) as an example of a rulesbased approach to corporate governance and its effects. 19. Explain the social responsibility in the context of corporate governance. 20. Explain the concept of the organisation as a corporate citizen of society. 21. Explain the general principles of disclosure and communication with shareholders. 22. Explain best practice corporate governance disclosure requirements. 23. Distinguish between mandatory and voluntary disclosure of corporate information.

24. Explain the reasons and motivations for voluntary disclosure. 25. Explain the purposes of AGM & EGM. 26. Describe the role of proxy voting
PART B INTERNAL CONTROL AND REVIEW.

27. Explain the importance of internal control and risk management in corporate governance 28. Identif the elements or components of internal control systems 29. Describe the function and importance of internal audit. 30. Explain the importance of independence in respect of internal auditor and also external auditor. 31. Explain all the ethical threats to auditor. 32. Describe and analyse the work of the internal audit committee in overseeing the internal audit function. 33. Explain the characteristics of the audit committees relationship with external auditors 34. Assess the need to report on internal controls to shareholders 35. Describe the content of a report of internal control statement and internal audit 36. Explain the features of good quality information. 37. Explain the need for adequate information flows to management for the purposes of risk management. PART C IDENTIFYING AND ASSESSING RISK 38. Describe management responsibilities in risk management.[ 39. Explain risk appetite and how this affects risk policy. 40. Compare (distinguish between) strategic and operational risks Explain the sources and impacts of the business risks i) market ii) credit iii) liquidity iv) technological v) legal vi) health, safety and environmental

vii) reputation viii)business probity ix) derivatives 41. Assess the impact upon, the stakeholders involved in business risk 42. Explain the ALARP (as low as reasonably practicable) principle 43. Evaluate the difficulties of risk perception including the concepts of objective and subjective risk perception. 44. Explain and evaluate the concepts of related and correlated risk factors PART D CONTROLLING AND MANAGING RISK 45. Explain the role of a risk manager in identifying and monitoring risk. 46. Explain and evaluate the role of the risk committee in identifying and monitoring risk. 47. Describe the importance of internal or external risk auditing in monitoring risk. 48. Explain the importance of risk awareness at all levels in an organisation. 49. Describe and analyse the concept of embedding risk in an organisations systems and procedures. 50. Explain the concepts of spreading and diversifying risk and when this would be appropriate. 51. Explain how business organisations use policies and techniques to mitigate various types of business and financial risks. 52. Explain TARA risk response strategies. 53. Explain the necessity of incurring risk as part of competitively managing a business organisation. 54. Explain how the size, structure and development of an organisation affect the attitudes towards risks. PART E PROFESSIONAL VALUES AND ETHICS 55. Distinguish between the ethical theories of relativism and absolutism 56. Explain Kohlbergs stages of human moral development. 57. Distinguish between deontological and teleological/consequentialist approaches to ethics.

58. Explain the ethical decision-making models in accounting and professional contexts: -American Accounting Association model -Tuckers 5-question model 59. Describe and evaluate Gray, Owen & Adams (1996) seven positions on social responsibility. 60.Describe and evaluate other constructions of corporate and personal ethical stance:[2] -short-term shareholder interests -long-term shareholder interests -multiple stakeholder obligations -shaper of society 61. Explain the nature of a profession and professionalism. 62. Explain what is meant by the public interest. 63. Describe how accountant may act (i) in the public interest; and (ii) against the public interest. 64.Explain and explore 'bribery' and 'corruption' in the context of corporate governance, and assess how these can undermine confidence and trust. 65. Describe and assess best practice measures for reducing and combating bribery and corruption, and the barriers to implementing such measures. 66. Explain and assess the concept of sustainability and evaluate the issues concerning accounting for sustainability . 67. Explain the social and environmental auditing 68. Describe the main features of EMAS and ISO 14000.