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Setting the benchmark in corporate integrity

Auditing Policies

Australian government launches mining probe

The Australian Securities and Investments Commission (ASIC) will attend the meetings of 20 domestic mining firms next month, after concerns were raised over selective briefings at Melbourne-based gold producer Newcrest Mining. The ASIC will also listen in on one-on-one calls with analysts.

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UK’s FRC rejects calls for compulsory audit rotation

Although it had hinted at imposing mandatory audit rotation when it began its review of the rules governing the UK’s accountancy market, the Financial Reporting Council (FRC) has turned its back on the proposals that many observers felt would lead to a more transparent market.

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Legal world “requires categorisation”

The legal industry is growing more competitive. With more and more graduates leaving university with a law degree tucked under their arm, legal firms are able to select from a large pool of determined and highly qualified junior experts. The knock on effect of that, of course, is that more and more specialised and multi-talented firms are popping up everywhere.

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Nigeria to implement corporate governance code by 2014

The Nigerian federal government has announced it is already working on a National Code of Corporate Governance, which will become effective as of January 1, 2014. The new code will contain stiff penalties for varying infractions on the part of corporation or executives. Though there are already industry specific guidelines in place in the country, none carry penalties or fines.

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When is government debt risky?

A government that does not tax sufficiently to cover its spending will eventually run into all manner of debt-generated trouble. Its nominal interest rates will rise as bondholders fear inflation. Its business leaders will hunker down and try to move their wealth out of the companies they run for fear of high future corporate taxes.

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Apple’s cash-flow problem causes development hold-up

I recently examined the problem of corporate short-termism from two nonstandard angles. One was that some short-termism is sensible. Large firms face an increasingly fluid economic, technological, and political environment – owing to more global and competitive markets, to the greater potential of technological change to alter firms’ business environment, and to governments’ growing influence over what makes business sense. In this fluid environment, large companies must be cautious before making large, long-term commitments.

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Mandatory auditor rotation unnecessary, says Canadian business institute

In light of recent concerns over how transparent companies are being in the way they report their finances, there have been repeated calls for the mandatory rotation of auditors to ensure there is no collusion going on between businesses and their accounting firms.

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EU seek bloc-wide corporate governance laws

In excess of 300 delegates from across the European Union and further afield are to – on both May 16 and 17 – partake in the 12th European Corporate Governance and Company Law Conference. An occasion that presently looks likely to instrument changes to the Commission’s Action Plan on Company Law and Corporate Governance.

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Hedge fund group sues Cayman Islands over corporate governance reform

The Cayman Islands are home to over 9,400 hedge funds, harbouring assets estimated to be worth close to $2.2trn. It has long been a popular investment destination, but over recent years, local government has faced calls from the international community to modernise its regulation, and in particular, make it more transparent. But a fiduciary services company based in the island has taken legal steps against the Cayman Islands Monetary Authority to prevent the regulator from legislating on any transparency or corporate governance reforms.

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KPMG to review internal safeguard review

KPMG has this April pledged to reassess its present internal safeguards, this being for reasons pertaining to an insider-trading case resulting in the company having quit as auditor to both Herbalife and Skechers. The repercussions of the case, regarding a senior partner having engaged in passing inside information to a share trader, have as such necessitated the partner’s immediate dismissal from the firm.

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The many faces of auditing

Both mandatory and discretionary, auditing comes in many guises

1 Integrated

A necessary undertaking for public companies, an integrated audit entails the auditing of both financial statements and internal control over financial reporting. Necessarily conducted by an external auditor, integrated audits are advantageous in that they encourage a holistic approach to the internal auditing process.

2 Performance

Conducted by either an asset manager or an outside firm, a performance audit verifies performance figures with those demonstrated to the public. Beneficial in that a performance audit allows an accurate insight into a firm’s returns.

3 Quality

Quality audits entail the systematic examination of a quality system, undertaken by either an internal or external quality auditor. Quality audits are integral in determining compliance with a defined quality system process and are a necessary requirement in maintaining the ISO quality system standard.

4 Regular health checks

Regular health check audits are carried out for purposes in understanding the present state of a specific project. Primarily conducted by an independent party, regular health checks are intended to further increase productivity or otherwise effectiveness.

5 Energy

Energy audits consist of an inspection, survey and analysis of energy consumption. Largely intended for the bettering of energy conservation, input is often sought to be reduced though without the hindering of subsequent output. Energy audits are largely meant for reducing overheads.

6 Regulatory

Otherwise termed financial, regulatory audits are intended for assessing the legality of processes pertaining to financial operations. Encompassing management, collections and expenditure, regulatory audits seek to determine a true and fair representation of policy and financial management.

Community spirit

Research has shown that companies giving back to the communities in which they work tend to enjoy better long-term results

1 IBM

An organisation famed for valuing innovation and entrepreneurship, IBM helps its employees to give back to the community in the way they best see fit. IBM distributes Activity Kits, each one designed around different volunteering opportunities. For those who want to use their expertise to help educate others, there are kits advising on how to conduct workshops for adults who want to get into the industries IBM operates in. Employees wanting to inspire future generation can use kits to engage children in workshops that see students make anything from paper dog houses to solar-powered model cars. Or those who prefer a more hands-on approach they can volunteer to help in disaster zones.

2 Ford

According to Henry Ford, “A business that makes nothing but money is a poor business”. This inspired Ford’s Accelerated Action Day in 2012, which saw more than 600 employees in American branches step away from their desks to work in local community projects, supported by various charities. Volunteers were dispatched to shelters, schools and family centres, helping to clean, paint and build in their on-going renovation missions. Projects included renovating shelter rooms for the Salvation Army’s centre in Detroit, building houses with Habitat for Humanity and creating therapy rooms for children with the First Step Domestic Violence Program.

3 JP Morgan

JP Morgan engages in many community projects globally, but recent years have seen emphasise focused on improving education on both sides of the Atlantic. Last year they helped to fund Achieve Together, a drive to recruit and inspire good teachers in disadvantaged areas of the UK. The first phase of the programme will roll out later this year, estimating to help 8,000 pupils. 2010 saw the firm launch a $325m initiative to support publically-funded schools in the US. The company granted $50m to community-development financial institutions to support new schools, as well as helping to tackle the financial problems of schools that already have a strong academic track record to keep them afloat.

4 Coca-Cola

5by20 is Coca-Cola’s initiative to empower five million female entrepreneurs worldwide by 2020. The multinational aims to focus its efforts on the small businesses across the world, currently focusing on Brazil, South Africa, the Philippines and India, by providing training with financial resources and mentors to women looking to get ahead in business. Since launching the program in 2010, Coca-Cola claim to have economically enabled more than 131,000 women. As part of the program, a new initiative in Kenya has helped female farmers grow mangoes for locally sold fruit juices, which has in turn helped create sustainable livelihoods around the farms.

5 Johnson and Johnson

As part of Johnson and Johnson’s No More Tears brand’s 50th anniversary, its Clean Water Initiative was launched as a combined effort with non-profit charity Water for People. Operating under the slogan “Because every baby deserves clean water”, the program has aided small, rural communities in ten of world’s poorest countries, including Malawi and West Bengal to tackle water contamination. The charity not only educates communities but also installs sanitation facilities in schools to provide clean water to hundreds of thousands of children.

Corporate Governance Report interviews international migration expert Sophie Barrett-Brown on the value of immigrants to UK corporations

Keeping up with UK immigration rules | Sophie Barrett-Brown| Video

Corporate Governance Report interviews international migration expert Sophie Barrett-Brown on the value of immigrants to UK corporations

Corporate Governance Report interviews international migration expert Sophie Barrett-Brown on the value of immigrants to UK corporations

The value of immigrants to the UK economy | Video

Corporate Governance Report interviews international migration expert Sophie Barrett-Brown on the value of immigrants to UK corporations

Corporate Governance Report interviews CapitaLand CFO Arthur Lang on the impact of corporate governance on Asia's real estate industry and investment

Arthur Lang: How corporate governance has affected Asia’s real estate market | CapitaLand | Video

Corporate Governance Report interviews CapitaLand CFO Arthur Lang on the impact of corporate governance on Asia’s real estate industry and investment

News

New union group pledges to ‘tackle corporate responsibility’

The Trade Union Share Owners group will put union values at the heart of corporate governance through the Trade Union Voting and Engagement Guidelines

Barclay’s share sale to plug capital hole

Barclay’s must raise £12.8bn to cover new regulatory demands

Michael Woodford, king of whistleblowers

The former Olympus CEO exposed a $1.7bn fraud at the heart of one of Japan’s most important corporations, and became a symbol for whistle-blowers everywhere

Shareholders reject Julius Baer pay report

Disgruntled shareholders at Swiss private bank vote to reject remuneration report at annual meeting

EU’s proposed CSR rules split industry and NGOs

Businesses call CSR rule changes too strict, while NGOs say they don’t go far enough

Italian banks to “change corporate governance”

Banks with more out-dated corporate governance structures were hit hardest by crisis, according to Fitch statement

Health audit ceases force’s IT system

Surrey Police forced to abandon failed multi-million pound computer system

UAE discusses role of CSR in sustainable development

Philanthropy and sustainability debated at forum arranged by UAE’s University Leadership Council

Legal world “requires categorisation”

As the legal industry continues to boom, it’s becoming ever more challenging for firms to choose where to seek council. Corporate Governance Report spoke to World Finance Editor Alexander Redcliffe about the magazine’s legal awards

A self-governing model

Sime Darby’s self-governing model allows it to stay focused and nimble

Nigeria to implement corporate governance code by 2014

New code will centralise corporate governance practices and ascribe penalties for lack of compliance

British banks’ comedy of terrors

Recent banking fiascos have proved that British officials struggle to revive failing banks or produce meaningful reform, even if they haven’t noticed it themselves yet, writes Simon Johnson

Churchill Mining grants 5.4 million share options

Following what many have perceived to be detrimental legal altercations through the past year, the London-listed mining company has since granted new share options to many of its employees

New corporate governance guidance published

The QCA has published a new guidance code for SMEs, focusing primarily on delivering long-term shareholder value

UK’s FRC rejects calls for compulsory audit rotation

Despite pressure to encourage greater competition in the UK’s accounting market, regulator waters down its proposed rule changes