Meaning Role of Auditors Role of Board of Directors Role of Shareholders Transparency and Disclosure Corporate Governace Code Corporate Issues and Need

1. Dr. Repalle Giddaiah M.Com, PhD.
Assistant Professor in
Commerce
School of Commerce
Loyola Academy – Telangana
drrepalle@yahoo.com.

3. It is the System of Rules and Regulations and Practices by which a Company is Directed and Controlled.
To Improve the Integrity and Performance of a Company.
It Applies to All Kinds of Organizations: Profit or Non -Profit.
It includes Board Directors, Managers, Employees and Shareholders.
The Elements of Corporate Governance are:
Transparent Disclosure. Well-defined Rights of Shareholders.
Internal Control Environment. Structured Board Practices Board Commitment.
Responsible for Corporate Governance Initiatives in India :
Ministry of Corporate Affairs (MCA) Securities and Exchange Board of India (SEBI) 1992,
Security Contracts (Regulation) Act, 1956; Depositories Act of 1996.
The Recommendations of the Kumar Mangalam Birla Committee in 2000 Clause 49 of the Listing Agreement.
Companies are needed to Corporate Audit for CSR.
The Four ‘P’s (Philosophies) of Corporate Governance: Ps are People, Purpose, Process, and Performance.

5. Advantages of Corporate Governance
 Compliance with Laws: includes the Rules, Regulations and Policies.
 Lesser Fines and Penalties: Able to save a Fortune on Unnecessary Fines and Compliances.
 Better Management: Work Atmosphere also takes care of Teamwork, Unity, Efficiency and a Drive for Success.
 Reputation and Relationships: To attract Investors, Brand Image and External Financiers, Relationship.
 Lesser Conflicts and Frauds: Eliminating the Possibility of Fraud and Conflict between Employees.
 The Burden of Staying Legally Compliant: Have Loads of Compliance.
 Increased Costs: a Few Documents to be Maintained:-
– Stock Sales and Purchases. – Legal Compliance Records. – Annual Registration.
 Maintenance of Segregation: Size of the Corporation, All Formalities and Requirements, Separate Legal Entity.
Dis Advantages of Corporate Governance

7. Lack of Transparency
Conflict of Interest
Shareholder Rights
Insufficient Accountability
Lack of Diversity
Globalization
Cybersecurity and Data Privacy
Risk Management
Issues: Corporate Governance

8.  A Corporate Governance Code is a Guide for Board Members and Directors, setting out how they should
approach Governance in their Organization.
 It is a Set of Principles for the Best Practice in Corporate Governance.
 A Cross between a Guidebook and a Rulebook;
 It usually Recommends How Directors and Executives Should Handle Governance.
 The Companies have Two Choices: JUST FOLLOW IT; If not, THEN EXPLAIN WHY?
Year Name of the Committee Area Covered
1998 Confederation of Indian Industry (CII) Desirable Corporate Governance - A Code
1999 Kumar Mangalam Birla Committee Corporate Governance (SEBI)
2002 Naresh Chandra Committee Corporate Audit and Governance
2003 N R Narayana Murthy Committee Corporate Governance (SEBI Revised)

9. Eight Corporate Governance Codes in India:
1. Governance Structure
2. Structure of the Board and its Committee
3. Director's Appointment Procedure
4. Directors' Duties, Remuneration and Performance
5. Risk Governance and Internal Control
6. Reporting with Integrity
7. Audit
8. Relations with Shareholders and other key Stakeholders

12. Transparency and Disclosure in Corporate Governance
Organization for Economic Co-operation and Development (OECD)
&
International Financial Reporting Standards (IFRS)
 Disclosure and Transparency should be the CORNERSTONE of Corporate Governance Laws and Codes.
 Disclosure means Making Information Available, so that there is transparency.
 Transparency refers to the Openness and Accessibility of Information about a Company’s.
 Companies provide Accurate, Reliable, Timely, and Comprehensive Information.
 It is the Process of Making Facts or Information known to the Public, Customers, Investors, and Govt.
involved.
 Concepts are Essential for Maintaining Trust, Accountability, and Ethical Behavior Within Organizations.

14.  Financial and Operating Results (Trading, Income, P&L)
 Company Objectives (Vision, Mission and Core Values)
 Ownership and Structure (Share Ratio)
 Board Information and Recommendation (Management)
 Stakeholder Information (Share and Voting Rights)
 Governance Information (CSR and CGBE)
 Independent Audit (Internal and External)
 Remuneration Policy (Wages, Salary, Bonus and Dividend)
 Regulatory Forms (Form 10-K, Form 10-Q, and Form 8-K)
https://www.oecd.org/countries/ukraine/1930691.pdf.

18.  Auditing is the Formal Inspection and verification of a Company’s Financial Statements and Records.
 It Plays a Significant Role in Guaranteeing Openness and Accountability for the Management;
 The Firm’s Accounts must be Verified and Audited.
 An audit is the Independent Examination and Evaluation of the various Books of Accounts.
 There are Two Types of Audits: Internal Audit and External Audit.
Internal Auditors are those who form a part of the company as Employees whereas
External Auditors are Independent.
 It is Predict the Future of An Organization by Analyzing the Past Accounting Period.
 As per the Companies Act – 2013- Regulatory Bodies like
The Securities and Exchange Board of India (SEBI,
The Quality Review Board (QRB),
The Institute of Chartered Accountants of India (ICAI) and
The National Financial Reporting Authority (NFRA).
The ICAI Auditing Guidelines.

20. Role and Responsibilities of Auditors in Corporate
Governance
1. Financial Statement Audit
2. Ensuring Compliance
3. Internal Control Evaluation
4. Risk Assessment
5. Objectivity and Independence
6. Communication with Stakeholders
7. Whistle-blower Protection
In this perspective, the Enron and Satyam
Computer Scams are notable examples of major
fraud committed.

21.  Board of Directors is a Group of elected individuals representing the shareholders.
 Board of directors are shareholders of the company and the governing body.
 Mostly, the Directors are elected by the Shareholders and they in turn elect the Managing Director.
 Some directors are appointed by the Government & financial institutions Industrial Finance
Corporation of India, Industrial Development Bank of India, Industrial Credit and Investment
Corporation of India and State Financial Corporations.
 elected by shareholders on a one-share, one-vote basis.
 Directors are elected to Two- or Three-Year Terms, with a subset of directors standing for re-election
each year.
 Issues at the boards to be discussed Such as Annual plans, cash flows, strategic plans, Periodic reports,
Internal audit reports, joint ventures, agreements etc.
 Meetings should be properly communicated and recorded.
 The BOD’s composition differs as per organizations. Usually, there is a CEO, board’s chairman,
directors, non-executive director, CFO, vice-president, zonal heads, etc.

23. Organization for Economic Cooperation and Development (OECD)

32. • Two Types of Shareholders i.e Equity Shareholders and Preference Shareholders.