Shared Flashcard Set

Details

Ethics test 2
2nd test
44
Accounting
Graduate
01/23/2012

Additional Accounting Flashcards

 


 

Cards

Term
audit
compensation
nominating
Definition
3 board committees that are required of listed companies by national stock exchanges
Term
9 to 15
Definition
typical size of directors
Term
a standing committee of the comapny's board of directors to act as a liason between managemnt and the external auditor
Definition
audit committee
Term
nominating committee
Definition
What committee is responsible for
• Reviewing the performance of the current directors.
• Assessing the need for new directors.
• Identifying and evaluating the skills, background, diversity, and knowledge of candidates for the board.
• Having an objective nominating process for qualified candidates to the board.
• Assisting in the election of qualified new directors.
Term
Audit committee
Definition
A committee composed of independent, nonexecutive directors charged with the oversight functions of ensuring responsible corporate governance, a reliable financial reporting process, an effective internal control structure, a credible audit function, an informed whistleblower complaint process, and an appropriate code of business ethics with the purpose of creating long-term shareholder value while protecting the interests of other stakeholders.
Term
Compensation committee
Definition
Board committee formed to implement and support the oversight function of the board particularly in areas relevant to the design, review, and the implementation of the directors’ and executives’ evaluation and compensation schemes.
Term
Enterprise risk management
Definition
A process, effected by an entity’s board of directors, management, and other personnel, applied in strategy setting and to the whole enterprise, designed to identify potential events that may affect the entity, manage risk to be within its risk appetite, and provide reasonable assurance regarding the achievement of entity objectives.
Term
Governance committee
Definition
Board committee consisting of both executive and nonexecutive directors established to advise, review, and approve management strategic plans, decisions, and actions in managing the company.
Term
Nominating committee
Definition
Independent board committee composed of at least three independent directors formed to implement and support the oversight function of the board pertaining to the recommendation, nomination, and election activities of directors.
Term
Strategic board
Definition
Board committee composed of both executive and nonexecutive directors charged with advising and approving management strategic plans, decisions, and actions, with members of the board serving only on the governance or other special board committees.
Term
Succession planning
Definition
Planning process designed to ensure proper planning for orderly succession to the company’s board and other senior executive positions.
Term
audit committee
Definition
what committee is responsible for
• Overseeing the financial reporting process.
• Monitoring the choice of accounting policies and principles.
• Monitoring the internal control process.
• Overseeing the hiring and performance of external auditors.
Term
corporate governance committee
Definition
what committee is responsible for
• Establishing the agenda for the board of directors to determine what the board should discuss with management and to what extent.
Term
• Structure.
• Proxy statement disclosure.
• Responsibilities.
Definition
List the principles and practices for ensuring the effectiveness of the compensation committee as recommended by The Council of Institutional Investors (CII).
Term
• Control the agenda and the meeting.
• Review past agendas and minutes of meetings to ensure adequate time and discussion were devoted to each issue.
• Revise the agenda as necessary and set priorities for meetings.
Definition
What are the responsibilities of the corporate governance committee?
Term
(1) formation; (2) independence; (3) member qualifications; (4) authority; (5) funding; (6) oversight function; (7) accountability; (8) charter; (9) agenda; and (10) orientation, training, and continued education. These audit committee principles provide guidance designed to promote effective and efficient audit committees.
Definition
The ten audit committee principles
Term
1. evaluating the perfromance of directors
2. evaluating the performance of executives
3. designing and implemtning compensation plans for directors and executives
4. disclosing the work of the committee
Definition
categories of the responsibilites of the compesnation committee
Term
internal auditing
Definition
value added service that improves the orgainztion's operations, risk management, internal controls, and financial reporting
Term
CAE
Definition
primarily responsible for managing, directing, and overseeing the internal audit fucntion
Term
listed companies MUST have internal audit function; prviatelyheld and no for profit not mandated
Definition
Term
`. objectives in line with stakeholder expectations
2. value driver identification
3. current state assessment of reviews and analysis of internal audit core processes, benchmarks, and best practices
4. soution development of preparing report findings, observations, and recommendations for imporvement in performance
Definition
four phase plan to appropriately assess internal audit quality and effectiveness
Term
external auditors
Definition
responsible for auditing the company's financial statements and providing reasonable assurance that they are prsented fairly and in conformity with GAAP and that they reflect true representation of the company's financial position and results of operations
Term
securities exchange act of 1934
Definition
set the requirement that companies that offer stock to the public in raising capital must have their financial statements audited by an independent public accountant
Term
process competiencies
Definition
pertain to auditors' ability to choose appropriate evidence gathering procedures and esceute auditing procedures
Term
reproting competencies
Definition
refer to audtors' ability and wilingness to discover and report material misstatements
Term
audit process failure
independent audit failure
Definition
two categories of audit failure
Term
regualtions and standars are more concerned with and address independet audit faioure rather than audit process failure
Definition
Term
significant deficiency
Definition
a deficiency, or a combination of deficiencies, in internal control over financial reporting that is less evere than a material weakness, yet important enough to merit attention by those responsible for oversight of the comapny's financial reproting
Term
material weakness
Definition
a deficiency, or a combination of deficiencies in nternal control over finanical reproting, such that there is a reasonable possibliey that amaterila misstatement of the coapny's annual or interim financial statements will not be prevented or detected on a timely basis
Term
unqualified
adverse
qualified/disclaimer
Definition
three types of audit opinions for ICFR
Term
auditor independence
Definition
a process that is affected by the appointment of auditors, services sproicded by auditors, and the manner in which services are provided
Term
decision management
Definition
consists of initiation and implemenation of strategies (management's responsiblity)
Term
decision control
Definition
ntials the ratification and monitoring of strategies (board of directors' fiduciary duty)
Term
(1) Represent shareholders by creating shareholder value.
(2) Align the interests of management and shareholders, while protecting considering the interests of other stakeholders (e.g., customers, creditors, suppliers).
(3) Define the corporation’s mission and goals.
(4) Establish or approve strategic plans and decisions to achieve the mission and goals.
Definition
Roles and responsibilities of boards of directors
Term
Duty of care
Duty of loyalty
Duty of good faith
Duty to promote success
Duty to exercise diligence, independent judgment, and skill
Duty to avoid conflicts of interests
Business judgment rule
Definition
Various fiduciary duties of directors
Term
One-Tier Board Model
Definition
- Consists of both inside (executive) directors and outside (nonemployee) directors. Inside directors are perceived as the decision managers and outside directors are assumed to have the power and duty to monitor those decisions
Term
Two-Tier Board Model (German board model) -
Definition
Consists of a supervisory board and a management board, with different authorities and responsibilities for members of each board
Term
Modern Board Model -
Definition
Proactively engaged in both a strategic and oversight activities
Term
audit
compensation
nominating
Definition
three required board committeess by lsiting standards
Term
Corporate governance
Internal controls
Financial reporting
Audit activities
Code of ethics conduct
Whistleblower program
Enterprise risk management
Financial statement fraud
Definition
Audit committee oversight responsibilities categories
Term
The committee should be composed of all independent directors who rotate periodically.
Definition
compensation committee composure
Term
Evaluation of directors.
Design and implementation of director compensation plans.
Evaluation of senior executives.
Design and implementation of executive compensation plans.
Definition
compensation commitee responsibilities
Term
both executive and nonexecutive directors
Definition
Corporate Governance Committee composition
Term
(1) reviewing the performance of current directors;
(2) assessing the need for new directors;
(3) identifying and evaluating the skills, background, diversity, and knowledge of candidates;
(4) having an objective nominating process for qualified candidates;
(5) assisting in the election of qualified new directors.
Definition
The nominating committee is responsible for
Supporting users have an ad free experience!