ICMAP

SYLLABUS 2016
Estd. 1951

COST AND MANAGEMENT ACCOUNTANT (CMA) LEVEL

CGE - Corporate Governance and Professional Ethics
(Open Book Online Assessment)
Weightage

Part-B Part-A Governance and Responsibility 70%

Part-A
Part-B Professional Ethics 30%

Syllabus Overview: l Understanding of the state (Governments) and its

Corporate governance refers broadly to the rules,
processes, or laws by which businesses are operated,
regulated, and controlled. However, Governance is more
than just board processes and procedures. It involves the
full set of relationships between company's management,
its Board, its share holders and other stakeholders
including employees, community and Society at large.
Government interface is an integral part of corporate
Governance and Macro Economic management policies
of the state and its regulatory mechanism depending
upon size and nature of Business Corporation. The
course is developed for Graduating students and focus
towards Corporate Governance System in Pakistan.
Learning Outcomes:
l Familiarization with the Corporate Governance
Framework Prevailing in the developed countries
(OECD model) and World Bank guide lines for
Developing Countries, SECP Code for Pakistan
regulatory mechanism requirements, code,
functional linkages and corporate responsibilities to
meet its obligations.
l In-depth knowledge relating the role of corporation /
Business Organizations in the era of globalization
and international economic integration of Business,
Trade and Industry thus creating efficient, reliable
and transparent corporate linkages with national,
multinational and international corporations,
regulatory bodies and Financial Institutions.
l Understand the importance of personal and
professional ethics in business environment
l Explain the need for ICMAP members to adopt the
highest standard of professional ethics
l Adapt and apply code of ethics issued by IFAC and
SAFA / ICMAP
l Identify the situations where ethical conflict arise and
explain how these conflicts are resolved

Detailed Contents Weightage Level of

in % Study Required
PART-A: GOVERNANCE AND RESPONSIBILITY
1. Importance and l Overview and need of Corporate Governance A
Scope of Governance l Concepts of Corporate Governance D
l Principle and problems of separation of ownership U
and control in corporate entities
l Key Corporate Actors in Corporate Governance A
l Issues in Corporate Governance D
l Approaches to corporate Governance A
l Investor's Preference for Good Governance 70 U
l Objective of corporate governance in the public U
and private sectors
l Governance in State owned enterprises U
l Regulatory mechanism A&D
l OECD Principles of Corporate Governance A&D
l Corporate Governance: Mechanism and Overview U, A & D
l Ingredients of Corporate Governance A
l Principles of Corporate Governance A

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SYLLABUS 2016
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l Role and rights of internal parties involved in corporate U, A & D

governance
Directors
Company secretaries
Sub-board management
Employee representatives (e.g. trade unions)
l Role and rights of external parties involved in corporate U, A & D
governance
Shareholders (including shareholders' rights and
responsibilities)
Auditors
Regulators
Government
Stock exchanges
Small investors (and minority rights)
Institutional investors
l Role of institutional investors in corporate governance U
systems
2. Corporate l Introduction U
Governance in l Problems faced by Developing and transition Economies A
Developing and l Institutional framework for effective corporate Governance A
Transition l Privatization policies of the Government A &D
Economies l Transparent and Fair Taxation Regimes U
l Independent Judicial system U
l Anti- corruption strategies A
l Reforms in Government U
l Strengthening Administration and enforcement capacity A
of Government
3. Agency l Introduction to agency theory U
Relationships, l Concept in agency theory (Agents, Principals, A
Agency Problem Agency, Agency Costs, Accountability, Fiduciary
and Agency Theories responsibilities and stakeholders)
l Agency Problems and Agency Cost D
l Principal and agent relationship in the context U
of corporate governance
l Principle of accountability in agency relationship A
l Explain the Agency theories: U
Transaction cost theory
Stakeholders theory
4. Concepts of Ethics l Openness, honesty and Transparency A
and Role of the l Independence A
Company Secretary l Accountability A
l Responsibility A
l Fairness A
l Reputation and reputation risk U
l Social responsibility U
5. Board Composition l Directors and shareholders powers and rights U
and Types of l Directors and shareholders U
Directors l The duties of directors U
l Fiduciary duties of directors U
l Fit and Proper Test of Directors A
l Duty of skill and care A
l Director's liability insurance U&A
l Fair dealing A
l Shareholders Powers and rights U
l Other restraining measures against directors A
l Other types of directors U
l The Law and Corporate Governance A&D

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6. Balance of Power l The role of the Board and Corporate Governance Issues U
on the Board l Board Operation U
l Details of Patterns of Roles and Responsibility A
l Suitability U
l Character and Qualities U
l Size and balance of the Board A
l The Board and Decision making U
l The roles of chairman and chief Executive Officer U
l Non- Executive Directors U
l Roles and duties of non executive directors U
l Regulatory framework for role of directors in boards U
l Board appointments U
l Induction and Training U
l Re-election of Directors U
l Succession Planning U
l Performance Evaluation U
l Two-tier Boards U
l Diversity on board meaning and issues faced due U
to diversity on boards
7. Board Committees l Role, responsibilities and importance of different board U
and their Role in committees:
Corporate Remuneration committees
Governance Nominations committee
Risk committees
Audit committees
l Evaluation of board own performance A
8. Remuneration l Remuneration of Directors D
System l Principles of remuneration D
l Purposes of remuneration and its components D
l Link of remuneration to strategy and market conditions D
l Impact on directors' behaviour for various components A
of remuneration i.e. basic salary, performance related
rewards, shares and share options, loyalty bonuses,
fringe benefits, retirement benefits
l Legal, ethical, competitive and regulatory issues A
linked with directors' remuneration
9. Approaches to l Different approaches to corporate governance U
Corporate based upon 'rules' and 'principles'
Governance l Different models of business ownership A
(Family ownership joint stock company)
l Reasons for the development of codes of A&D
corporate governance
l Development of corporate governance codes D
l Major corporate governance codes D
l Objectives and limitations of, corporate governance D
codes
l Organization for economic cooperation and D
development (OECD) Report (2004)
l OECD Principles of Corporate Governance: U
The rights of share holders
The equitable treatment of shareholders
The role of stakeholders in Corporate Governance
Disclosure and Transparency
The responsibilities of the Board
l International corporate governance network (ICGN) U
Report (2005)
l Code of Corporate Governance in Pakistan A&D
Issued by SECP

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10. Corporate Social l Concept of corporate social responsibility U

Responsibility and l Power of stakeholder and its effects on corporate U
Corporate governance with the help of Mendelow model
Governance l Issues of 'ownership,' 'property' and the responsibilities A
of ownership in the context of shareholding
l Concept of the organization as a corporate citizen of U
society with rights and responsibilities
11. Governance: l Financial Reporting and Auditing A
Reporting and l Financial Reporting and Corporate Governance U
Disclosure l Transparency and Financial Disclosure in A
Corporate Governance
l Role and Responsibility of Investors U
l Misleading Financial Statements A
l The role of external auditors A
l Auditor independence A
l Controls over the audit profession A
l Financial Reporting A
l Audit committee A
l Define and distinguish between mandatory and A
voluntary disclosure of corporate information
l Nature, reasons and motivations for voluntary U
disclosure in a principles-based reporting environment
l Purposes of the annual general meeting and U
extraordinary general meetings for information
exchange between board and shareholders
l Role of proxy voting in corporate governance A
12. Public Sector l Describe, compare and contrast public sector, private D
Governance sector, NGO forms of organization
l Purposes and objectives, performance, ownership U
and stakeholders
l Describe, compare and contrast the different types U
of public sector organizations
l Assess and evaluate the strategic objectives, U
leadership and governance arrangements specific to
public sector organisations with comparison to
private sector
l Nature of democratic control, political influence and U
policy implementation in public sector organisations
l Obligations of the public sector organizations to meet
the economy, effectiveness, efficiency (3 E's) criteria U
and promote public value
13. Decision Making in l Relative control of stakeholders in decision making A
Corporate l Relationship Amongst the Stakeholders U
Governance l Theories of Corporate Governance U
l Corporate Mechanism and control A
l Internal Corporate Governance A
l External Corporate Governance A
l Performance Monitoring in Corporate Governance A
l Remuneration System A
l Bankruptcy System A
l Ownership Structure in Corporate Governance A

PART-B: PROFESSIONAL ETHICS

14. Importance of Ethics l What is Ethics? A
l Why Ethics are Important? U
l Role of Law in Ethics U
l Meaning of Code of Ethics A
15 Personal Ethics l An overview of ethical theory. Greek and Modern 30 U
l Descriptive Ethics and Normative ethics U
l Theory of Amorality and Theory of moral utility U
l Difference between Immoral, Amoral and Moral U

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SYLLABUS 2016
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l Differences between Symmetrical ethics and U

asymmetrical ethics
l Approaches to Ethics Conventional, Principles U
and Law
l Major resource of ethical values (Religion, Philosophy, U
Culture and Law)
l Moral Reasoning (Moral Right Views, Individualism U
View, Utilitarian View and Justice View)
l Ethical Universalism, Ethical Relativism, Cultural U
Relativism and Moral Absolutism
l Values, Types of values, Terminal Values, U
Instrumental Values
16. Professional Ethics l Role of ethical codes and importance to the A&D
professional accountant
17. General Application l Difference between rule based and principle U
of the Code of Ethics based ethical codes
issued by IFAC and l Fundamental principles of IFAC code of ethics A
SAFA / ICMAP l Conceptual framework Approach A
Part - A l Relationship and circumstance that may create threat A
to the fundamental ethical principles
l Categories of threat to fundamental principles of ethics U
l Measures (safeguards) taken to eliminate threat A
l Importance of integrity and objectivity A
l Communicating with those charged with governance U
l Situations that may cause risk to integrity and U
objectivity
l Importance of confidentiality and the risk of U
disclosure of information
l Situations when confidential information may U
be disclosed
18. ICMAP's Ethical l Fundamental Principles A
Guidelines l Ethical Guidelines by ICMA Pakistan A
l CMA (ICMAP) Act and Regulations A
19. Ethical Conflict l Ethical Conflicts and Approaches for Controlling A
Ethical Behaviour
l Ethical Conflict of a professional accountant A
l Causes of ethical conflicts A
l Measures to be taken to resolve ethical conflicts U
TOTAL WEIGHTAGE 100

NOTE:-
U = Understanding
A = Application
D = Decision

Institute of Cost and Management Accountants of Pakistan

136 (Constituted under Cost and Management Accountants Act, 1966)