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Professional Accountant - Essay Example
Author : jgulgowski
Finance & Accounting
Pages 10 (2510 words)
Your Name BSc Finance and Accounting Professional Accountant Assignment Part 1 There have been several trends and changes in corporate governance in the UK since the Cadbury Report was released in 1992. This has been influenced by many reports including the Hampel Report, and the Greenbury report which sought to create a combined code for the directing and control of businesses in the UK…
This is based on the Financial Services Markets Act of 2000. The Corporate Governance Code of 2010 is overseen by the Financial Reporting Council. Thus, public listed companies must comply with the UK Corporate Governance Code 2010. Those who fail to comply with the corporate governance Code have to explain why they departed from it. Private companies are encouraged to use the UK Corporate Governance Code of 2010. The fact that public listed companies are required to comply or explain makes the UK Code a principles based code. This is in contrast with the rules based code which is connected to the Sarbeans-Oxley Act of the United States. There are three elements of reporting that are meant to prevent fraud and wrongful reporting by people charged with corporate governance: opportunity, incentive and rationalization (Strohm, 2006). In a rules-based system of corporate governance like the United States, preventing inaccurate reporting is done by limiting opportunities (Jeffrey, 2011). This is done by precision and setting strict standards for reporting. Failure to comply with the precise and strict standard leads to legal sanctions. ...