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International Financial Accounting and Theory - Essay Example
Finance & Accounting
Pages 7 (1757 words)
INTERNATIONAL FINANCIAL ACCOUNTING AND THEORY Instructor Institution Date QUESTION ONE Introduction Corporate governance is defined by Sheridan, Jones and Marston, 2006) as the way companies are controlled and it involves a specific system which guides the manner in which a given company is directed…
The development of corporate governance in the UK since 1991 up to 2011 is assessed in this paper with a discussion on the various reports which are involved in the changes in the governance of companies in the UK. There were many corporate governance failures within UK companies such as Maxwell communications in the mid and late 1980s which included risky acquisitions, large debts and missing company assets. This led to the setting up of a committee in May 1991 which was chaired by Sir Adrian Cadbury to investigate the failures in corporate governance of companies with an aim of making recommendations for necessary changes to the control of companies. Shelmerdine and Walter (2001, p. 142) assert that the aim of the committee was to perform a thorough investigation of the corporate governance system in British Companies so that relevant suggestions would be provided in their report to ensure that the confidence of investors on the British Companies was regained. The Cadbury report which was released in December 1992 recommended that the companies which were listed in the report had to provide their annual accounting reports which had to be reviewed by auditors for verification and compliance. ...
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