Corporation – an artificial being created by operation of Top 10 Employers in the Philippines

law, having the right of succession and the powers,

attributes and properties expressly authorized by law or 1. San Miguel
incident to its existence 2. Nestle Philippines
3. Accenture
Stakeholders – anyone external or internal to the 4. BDO – Unibank
corporate organization that has interest and is directly 5. Ayala
or indirectly affected by the operations of the 6. Coca cola Philippines
corporation 7. SM Corporation
8. Google Philippines
1. Clients – customers, consumers 9. Procter and Gamble Philippines
2. Management – decision-makers, agents of 10. ABS – CBN
shareholders (Agency Theory)
3. Public – affected by any movement of the Auditing
corporation; it may be a customer or not
4. Creditors – those that lend money to the  It is a systematic process by which an
business; or a supplier that has a receivable on independent and competent individual obtains
the business and evaluates evidences regarding assertions
5. Shareholders – investors; ordinary and about economic events and activities to
preference shareholder/stockholders ascertain the degree of correspondence
6. Employees – investors of industry or skills between those assertions and established
7. Government – regulators; benefits from the criteria and communicating the results to the
taxes paid by corporation; they need assistance interested users
from the corporations to provide the needs of  Improves the Financial Statements by giving
the people credibility to it; to protect the shareholders

Purposes of a Corporation Interested users – primarily shareholders

1. Early stage of survival – build the momentum Auditing does not play a role on the accounting cycle,
first Accounting ends, Auditing begins
2. Earn profit – both for the shareholders and the
customers Kinds of Auditing
3. To offer vital goods and services 1. Internal Auditing
 Involves internal auditor
Multinational Corporations  Internal auditor in an internal employee
hired by the company
 same as international corporation
2. External Auditing
 has home country, centralized management
 Involves external auditor
 offers not varying goods, same everything
 External auditor is a third party
 host countries must report to home country
employee hired by the shareholders
Transnational Corporations
Internal auditing – an internal control, control placed
 one kind of multinational corporation on departments to safeguard the interest of te
 can make their products different depending on shareholders
the culture of the host country e.g., segregation of duties
 they can decide on their own
Relation of good Governance and Auditing
Good governance – the responsibility given to the
management to increase shareholder values
Auditing – serves as checkpoint, to know if the
management is doing right
Reasons why management is acting in behalf of the
shareholders
1. Compensation
2. Powers
Chief Financial Officer (CFO)
 Auditing is headed by him
 Principally responsible for the financial risks of
the business
 Record keeping, reporting and financial
planning
Audit Committee
 Group of people internal to the company and is
obliged on overseeing the company’s financial
reports and processed and the quality of the
overall finance function
 Part of the Board of Directors, performs check
and balance
“One of the biggest decisions in the world is the hope
that the evils of the world are to be cured by legislation”
- Thomas Reed, 1886
Forms of Government
1. Unitary form of Government (centralized) -
single power in which the central government is
ultimately supreme and any administrative
divisions exercise only the powers that the
central government chooses to delegate
Branches:
a) Executive
b) Legislative
c) Judiciary
2. Federal Form of Government (Federalism,
decentralized)
 a system that divided up power
between a strong national government
and smaller local governments
 controlled by a prime minister
 80% of taxes is retained by the
administration, 20% is to be remitted
for the protection of the country
Significance of Organizational Structure to Good
Governance
Organization – a complex and adaptive system which
uses people, tasks, and technologies to achieve
common goals
 Legislation and/or laws are nonsense of the
organization has a poor structure because such
laws cannot be implemented well
Organizational Structure – the pattern of relationship
among the positions in a business and the members of
it
 Boxes represent position
 Lines represent relationship
Kinds of Organizational Structure
1. Functional – structured by area of specialization
Advantage: Focus on a specific work
Disadvantage: Too much focus which lessens
knowledge regarding other fields
 2. Product/Service – organization is divided by 4. Matrix
product or service line – a grid structure rather than hierarchical
– dual relationship
– project based structure

Advantage: Precise and Accurate Costing Advantage

Disadvantage: Competition (specific goal is for specific
 Asset are well shared with other departments
product)
 Relational aspect of staff internally

Disadvantage – lack of accountability

3. Geographical
Business Regulations from the Government
– usually for international or
multinational companies which basis 1. Advertising Regulations
rely on location
– cultures, belief and traditions shall be a) Advertisements should be true and not
considered misleading
– departments on lower management b) Businesses should be ready to back up
may vary their claims
– reason for variation of management is c) Advertisement must be fair to
because each country has its own competitors
advantage and specialization 2. Employment and Labor
 Regulated by DOLE (Department of
Labor and Employment)
 Interviews are tough because 30% of
the expenses of company goes to
payroll
 Manpower is the biggest investment
 Regulated by DOLE through Regional
Tripartite Wages and Productivity Board
(RTWP)
 To determine salaries
Advantage: Country-specific focus
depending on industry,
Disadvantage: misalignment of roles to set the minimum
wage per municipality
3. Environmental Regulations
 Through the aid of DENR with the aid of
Environmental Management Bureau
(EMB)
4. Privacy Regulations
5. Safety and Health

 If the 5 regulations were completely

implemented, good governance exist