Research Problem and Research Objective
Discuss about the Responsibilities And Contribution Towards Corporate Governance.
In order to arrive at an appropriate corporate environment globally, corporate governance framework was designed (Cohen, Krishnamoorthy & Wright, 2010). Framework for corporate governance in Australia has been incorporated by Australian Securities and Investment Commission (ASIC). The ASIC provides a framework for corporates operating businesses in Australia and guidelines for corporates to follow. However at various instances there are challenges that are faced in managing roles and responsibilities charted out as per corporate governance standards. The board of directors implementing the standards needs to accommodate and coordinate amongst various stakeholders of the Company in order to cater to corporate governance standards as laid down in ASIC (Tricker & Tricker, 2015). The scope of the current analysis deals with role that accountants and auditors have towards corporate governance specially regarding case related to Wesfarmers. A brief literature analysis and data collection procedure has been included for the same purpose.
Corporate governance standards needs to be applicable as per ASIC, where the Board of Directors need to comply with. management along with Board of Directors of the Company, especially Wesfarmers need to adhere to responsibilities and contribution towards corporate governance. In the current scope of the study, it was recognized that role of accountants and auditors is indispensible in order to adhere to corporate governance standards. In order to address to the above research problems, the following research objectives need to be attended to.
- Research Objective 1: To understand the role of accounts in corporate governance
- Research Objective 2:To order to analyse role of auditors in corporate governance
- Research Objective 3:To analyse roles of other stakeholders towards corporate governance
- Research Objective 4:To understand responsibilities of accountant and auditors towards corporate governance
- Research Objective 5:To understand contribution of accountant and auditors towards corporate governance
Corporate governance alludes to the way an organization coordinates and controls its institutional frameworks, morals as well as records. It centers around advancing straightforwardness and reasonableness inside foundations and associations by checking execution and guaranteeing responsibility (Armstrong, Guay & Weber, 2010). In such manner, accountants and auditors fill in as one of the essential defenders of corporate administration in any association. One of the essential parts of outer evaluators in Management is securing the interests of investors. accountants and auditors along with external auditors, reports the condition of an organization’s fund and bear witness to the legitimacy of money related reports that may have been discharged. They guarantee that the board gets exact and dependable data. The board may likewise scrutinize the evaluators’ perspectives and appraisal on the propriety of the bookkeeping standards utilized by an organization. Accountants and auditors may acquaint measures and arrangements outlined with propel responsibility in the working environment (Farrar, 2008). Punishments for such acts could incorporate stripping the supervisor of his position or his remuneration, for example, decreasing yearly rewards, and even benefits.
Theoretical Background
Accounts and auditors help advance corporate administration by leading period chance appraisal (Carcello, Hermanson & Ye, 2011). Examiners survey the safety efforts that an organization has set up against corporate misrepresentation. Notwithstanding surveying potential dangers, evaluators likewise dissect the general hazard resilience of the organization and in addition the endeavors the organization has made toward relieving financial frauds. For example, if an organization or government office has a failing to meet expectations informant framework, endeavors might be made to enhance this.
Zaman, Hudaib and Haniffa (2011) has suggested that review board of trustees ought to be autonomous; least in size and individuals ought to be fiscally master. Review advisory group ought to have correspondence to examiner and investors as well. It has been gathered that review board of trustees can work adequately if its individuals are more autonomous. The accountants and auditors are at risk to give a free and reasonable view which can add autonomy to inspector. Right mix of review panel individuals is the most noteworthy choice to execute corporate administration effectively. Advisory group with qualified and conferred individuals from all kinds of different backgrounds with information available of the organization’s business will have the capacity to execute its undertakings effectively.
Accounts and auditors can help guarantee effective corporate administration by developing effective emergency Management intended at utilizing affirmations of extortion or debasement. The arrangement normally includes relegating obligations to various regulatory authorities. Therefore in case the organization winds up associated with a money related emergency, authorities have a dynamic arrangement that they can use in supporting certainty among speculators (Mallin, 2011). Internal auditor’s designs may likewise incorporate control measures that are to be utilized with the media and law-authorization authorities. The endeavors of an outer examiner help encourage a decent association with controllers. Most controllers are steady of organizations and offices that seem to have straightforward activities.
Accountants and auditors assess the association of an organization for consistence with directions. Controllers are additionally more prone to trust organization divulgences after an examiner confirms them (Christensen, Kent & Stewart, 2010). The obligation of review advisory group in the territory of corporate administration is to give affirmation that the enterprise is in sane consistence with applicable laws and directions, is leading its issues decently, and is keeping up compelling controls against representative irreconcilable circumstance and fraud. A review board of trustees comprising autonomous directors can implement control on the administration and consequently going about as a kind of confirmation to the investors that they will have full knowledge regarding appropriate data (Han, Kang & Yoo, 2012). Imparting an association’s corporate governance is a key part of group and financial specialist relations.
Presentation of Shareholders Interests
In order to have great corporate governance, review board needs asset people to go about as autonomous executive on whose shoulder lays the obligation to take the organization in the correct way, interest for more exposures, straightforwardness and responsibility and execution norms for financial specialists and bank and assurance for investors. The investors of the organization put high trust on the auditor’s report, which clearly demonstrates the genuine and reasonable perspective of the records of the organization. The inspector ought to play out their obligations with extraordinary care and cautiousness to guarantee that there is no unlawful or disgraceful exchange.
Examiner autonomy would be shielded if review board of trustees were comprised of a larger part of autonomous and non – official chiefs, and this may mean that their free status would add to inspector’s autonomy through connecting correspondence organize. Lin and Hwang (2010) found that a review council if will probably bolster the evaluator as opposed to the administration in review contrasts and the level of help is consistent crosswise over individuals from the review board which will secure enthusiasm of investors as well. ASIC undertakings rules have prescribed legitimate divulgence to the investors and contributing group, which is finished by part and impact of examining board of trustees as it were. This article centers on the part of inspector and evaluating board of trustees in corporate administration and securing enthusiasm of investors and contributing group. The appraisal of what these two powers ought to do under statutory structure for investors and what really they are doing. The ability of the review board of trustees to perform freely and bring up issues to administration will animate inspector to work proficiently and their reasonable execution will encourage great corporate administration. The obligations of chiefs might be characterized into four classes – guardian obligations, obligations of care, statutory obligations and different obligations. It is watched that dominant part of corporate extortion has happened because of rupture of these essential obligations by executives. Be that as it may, introduce day talk is more on struggle on obligations – reliability to the organization and responsibility to the contributing group.
Research methodology is of prime importance when it comes to detailed analysis combined with critical reasoning regarding a particular research prospect. This section of study holds a detailed sketch of research methods and processes which has been adapted by the scholar to reach to a certain conclusion or to meet the final objective of the research subject (Matthews & Ross, 2010). It is the description of the supposed solution to the research problem which was assigned to the scholar. The following chapter first defines suitable and significant methodologies first and then justifies the different methods chosen in the study for accomplishing its objectives.
Promoting Accountability
Research philosophy determines the complete overall structure of a study by analysing every aspect of it. The concerned scholar is given four distinct options to choose from, which include rhetoric, epistemology, axiology, ontology, and research philosophy. Rhetoric research philosophy is applied in such studies which has the principal aim of in-depth analysis and inspection of problems with exploration of all corresponding aspects to interpret the results and ultimately the formulation of judgments (Miller et al., 2012). Restoration of Epistemology can be done by a scholar when the primary object of the study is breakdown of disposition and sequencing of specifics of correct areas. Axiology is used in such cases where there is abundant usage of aesthetics and ethics in the form of crucial variables in the study which is being done. Ontology, in the other hand is opted in those studies where the primary objective is replication of individual understanding capability regarding realism combining with truth states of affairs. In this study, the scholar will aim at using epistemology principles to arrive at results related to findings of the study.
The approach to research is completely based on the decisions made by the individual regarding the analysis and adoption of the qualitative and quantitative approaches. Inductive or deductive approaches can also construct a part of the research approach.
Deductive research approach is that kind of an approach where, applied forms of theories are undertaken to construct results. Although in Inductive approach, results from the observation are tallied with the theories and final result is obtained via formulating both of them together.
In case of subjective or qualitative approach, qualitative data is collected for the purpose of the study. Whereas in case of quantitative approach, measurable data is collected on which mathematical calculations is applied.
It is the most critical component of research methodology which establishes an operational research process by determining the efficiency and functionality of the whole process.
There are four types of research designs from which a scholar can select, which best suites his purpose.; this include, predictive designs, descriptive, exploratory, explanatory. Predictive research design is chosen where the results of explanatory research are used for the prediction of the upcoming scenarios. A descriptive research design is pursued where the study needs detailed description of specific cases. Exploratory study is used where dearth of information is needed and also the information has to be obtained from different places as well to construct a compact and concrete solution. Explanatory design is resorted in such cases, wherein the researcher wants to settle on fundamental associations which are shared by certain variables under the study. For the purpose of this study, descriptive analysis has been used.
Risk Assessment and Planning
Research methods are generally taken by a researcher to achieve the wanted results from the research topic. These are tools, adopted by a researcher for collecting information from primary sources to support the research designs and ultimately to accomplish the objectives of the research (Humphries, 2017). The various research methods which can be adopted by a research scholar are outlined below.
Observation: There are mainly two types of observations namely structured and participative. Structured observations are adopted in case of qualitative studies. Participative observation is adopted in quantitative studies.
Interviews: Two types of interviews can be selected by the scholar, namely, structured interview and semi-structured interview. In case of structured interviews, the interviewee acts according to the predefined code, predetermined by the interviewer which in turn limits the flexibility of the interviewee. Semi-structured interviews are flexible interviews in which case the interview is although guided by a certain guideline but the interviewee can express all their opinions and ask the scholar all their queries without any limitation.
Questionnaires: Questionnaires are nothing but different sets of questions which are asked to the sample population of people. These questionnaires can be of two types; open-ended and close-ended, for any given research topic or subject. In a close-ended questionnaire there is a list of questions with pre-defined opinion or answer choices for the sample respondent. But in case of open-ended questionnaires the respondents are given complete liberty to express their opinion regarding the particular topics enquired about in the questionnaire.
Focus groups: here, the researcher forms a group of different but specific number of people for discussion regarding a given agenda corresponding the researcher’s topic, this is done for taking down valuable points obtained from individuals in the discussion. This helps in result interpretation afterwards. The study will make use of mixed approach, to collect data from varied sources in order to findings for the study. The scholar will aim at collecting data from participants mostly through survey and questionnaire methods.
Sampling is a technique by which the researcher can identify a particular set of population which has resemblance to the whole population and which represents the population altogether. A research with the complete population is impossible to carry out and hence sampling is the main need of data analysis. The results obtained from a sample survey can be extrapolated which avails percentage similarity with a complete population opinion.
Data is generally collected via using primarily two methods known as; Primary and secondary source. The primary data is nothing but the virgin data which is collected originally for meeting the objective of the research interest and the secondary source data are collected from pre-published sources which are apt for the study (Williams, 2011). Primary data was collected from the employees and managers of the companies by selecting two separate set of respondents. In some cases, the employees were approached randomly by going directly to the offices, they were requested to participate in the survey and if they agreed, questionnaires were given to them for collecting the primary data in the most random format. Although it was obvious that reaching all the employees physically was not possible and hence questionnaires were sent to them via email, as produced by their respective firms and they were requested to participate in the analysis and were asked to email their response in the same way. In case of interviews, managers were physically approached after scheduling the meeting with them. Secondary data has been gathered from differing sources like journals, articles, books, magazines, newsletters, government periodicals, newspapers and internet publications and so on. The scholar will aim at primary as well as secondary data collection from employees at Wesfarmers.
To analyze the data, obtained from the questionnaires frequency analysis the standard statistical and mathematical tools were used. The data was analyzed by using MS Excel Tool pack. For the analysis of qualitative data, which was obtained via interviews, descriptive analysis method was implied.
- It was ensured that there was no manhandling of information throughout the study.
- Respondents were supplied with security of information by reassuring complete seclusion, inscrutability and secrecy.
- The participation of the respondents was completely out of their consent, the respondents weren’t forced to participate in the study.
- The purpose, scope and the aim of the research was duly notified and explained properly to the respondents and by this way complete lucidity was made for communication purposes.
- No biasness was performed from the side of the scholar and this was also completely assured.
The only limitation of the study is the sample size, which has been used for the study. The sample is very small in size when compared to the complete size of the population and hence the observations obtained here, can’t be taken as a due representative of the complete or whole population. The scope of the study has been limited only to collecting data from employees at Wesfarmers.
Reference Lists
Armstrong, C.S., Guay, W.R. and Weber, J.P., 2010. The role of information and financial reporting in corporate governance and debt contracting. Journal of Accounting and Economics, 50(2-3), pp.179-234.
Carcello, J.V., Hermanson, D.R. and Ye, Z., 2011. Corporate governance research in accounting and auditing: Insights, practice implications, and future research directions. Auditing: A Journal of Practice & Theory, 30(3), pp.1-31.
Christensen, J., Kent, P. and Stewart, J., 2010. Corporate governance and company performance in Australia. Australian Accounting Review, 20(4), pp.372-386.
Cohen, J., Krishnamoorthy, G. and Wright, A., 2010. Corporate governance in the post?Sarbanes?Oxley era: Auditors’ experiences. Contemporary Accounting Research, 27(3), pp.751-786.
Farrar, J., 2008. Corporate governance: theories, principles and practice. Oxford University Press.
Han, S., Kang, T. and Yoo, Y.K., 2012. Governance role of auditors and legal environment: Evidence from corporate disclosure transparency. European Accounting Review, 21(1), pp.29-50.
Humphries, B., 2017. Re-thinking social research: anti-discriminatory approaches in research methodology. Taylor & Francis.
Lin, J.W. and Hwang, M.I., 2010. Audit quality, corporate governance, and earnings Management: A meta?analysis. International Journal of Auditing, 14(1), pp.57-77.
Mallin, C.A. ed., 2011. Handbook on international corporate governance: country analyses. Edward Elgar Publishing.
Matthews, B. and Ross, L., 2010. Research methods. Longman/Pearson Education.
Miller, T., Birch, M., Mauthner, M. and Jessop, J. eds., 2012. Ethics in qualitative research. Sage.
Tricker, R.B. and Tricker, R.I., 2015. Corporate governance: Principles, policies, and practices. Oxford University Press, USA.
Williams, C., 2011. Research methods. Journal of Business & Economics Research (JBER), 5(3).
Zaman, M., Hudaib, M. and Haniffa, R., 2011. Corporate governance quality, audit fees and Non?Audit services fees. Journal of Business Finance & Accounting, 38(1?2), pp.165-197.
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