Similarities and differences
Discuss About The Corporate Social In Corporate Embedding.
Accountants and auditors play a major role in keeping the financial records of any firm. They prepare and assess the financial records of the businesses and ensure that those records are precise and taw payments are done regularly and on time. Corporate governance refers to the mechanisms and processes that control and direct the business operations. The principles and structures of the governance help in identifying the rights and responsibilities of distribution among the different participants, such as, board of directors, shareholders, managers, auditors, creditors, regulators, and various other stakeholders. The theories on accounting and corporate governance work as a guideline for the firms in managing the business of the accountants and auditors and ensure a righteous working environment for all. All these theories present some assumptions and methodologies, which create a foundation for the accounting processes and practices.
Auditing also comes with accounting. Auditing refers to the practices, which ensure the current practices and the activities in auditing has been performed efficiently and effectively and at the same time, follow the auditing standards. The accountability, transparency in the system and improvements in the process are the focus of the auditing operations for achieving better business outcomes. Authenticity and credibility of the financial reporting are encouraged and promoted by the auditing theories. This directly follows from the theories of corporate governance. Hence, corporate governance includes both the accounting and auditing and these two are interrelated. The research paper focuses on the identification of the contribution of the accountants and auditors and management of their roles and responsibilities in the financial institutions of Australia. To focus on the research aim and objectives, four literatures will be selected and analyzed. This analysis will be based on four themes. The literatures will be based on the following themes namely, roles and responsibilities of accontants and auditors, corporate governance in the financial institutions and contribution of accountants and auditors in corporate governance.
- Public sector governance and accountability. Critical Perspectives on Accounting by Almqvist, R., Grossi, G., van Helden, J. and Reichard, C., 2013
- Corporate governance and corporate social responsibility disclosures: Evidence from an emerging economy. Journal of business ethics, by Khan, A., Muttakin, M.B. and Siddiqui, J., 2013
- Embedding corporate social responsibility in corporate governance: A stakeholder systems approach. Journal of Business Ethics, by Mason, C. and Simmons, J., 2014
- Akinola, Amos Olusola., 2013. The Roles of Accountant and Auditor in Corporate Governance in Nigeria. International Journal of Humanities and Social Science., 4, 26-38.
All the above literature papers revolve around a common theme, that is, financial activities of the corporate sector and auditing scope. In these papers, the authors have provided evidences and real world scenario that are beneficial for the corporate organizations to take appropriate decisions. In all of these articles, various aspects of financial reporting, auditing, accounting and corporate governance have been discussed, which can help the companies to improve the existing financial and accounting activities of the businesses. Since, financial reporting is very crucial in any business and creates a great impact on the overall business performances, the authors have kept that as a common theme in the papers and threw light on different perspectives of the subject. They authors have used different type of study designs to for adding value to the work. However, although the common themes of the articles are the financial accounting and auditing, the difference lies in their approach and direction of the studies in the ways of conducting them.
Corporate governance
Regarding the role of the auditor committee, Mason and Simmons (2014) highlighted that the Australian government has introduced new rules, regulations and laws for facilitating the auditors and accountants in order to protect the interests and rights of the stakeholders and shareholders and improve the effectiveness of the account management and auditors’ committee. Khan, Muttakin and Siddiqui (2013), showed by using the legitimacy theory that external pressure by the stakeholder groups and the mechanisms for the corporate governance involving the independent outsiders may influence the CSR disclosure and the corporate governance play a vital role to ensure the organizational legitimacy through the CSR disclosure. They had taken the case study of Bangladesh organizations. The study analyzed the secondary data and found that the particular board characteristics and ownership structures are important for disclosure. These include the financial reporting and the roles and responsibilities of the accountants and auditors in implementing and following the rules of CSR disclosure.
Almqvist et al. (2013) discussed various aspects of corporate governance in their paper on the same subject. The paper developed a framework of the connotative meanings of the term corporate governance. The authors applied secondary theoretical research and found a variety of meaning and approaches of this term. Among all, it includes the financial reporting aspects also. The term is mainly based on the combination of the definition and strong motivations that force the organizations to adopt ethical practices in accounting and auditing. The codes for corporate governance have influenced the efficacy of the accounting and auditing, on the basis of the stakeholders’ interests. The accountants and the auditor have the power to implement and maintain the corporate governance and fair practices and this helps in not only improving the consulting but also in ensuring that the rightful and good practices are followed by the companies (Mason and Simmons 2014).
Financial institutions are the establishments, which conducts the financial transactions, like, loans, deposits and investments. The roles and responsibilities of the auditors and the accountants are much wider in the financial institutions than in any other. Hence, the scope for implanting the corporate governance is much higher in these establishments. As stated by Akinola (2013), in the context of Nigeria, that, the accountants and auditors play the role for bridging the gap between the managers in both the public sector and the private sectors. The author has focused mainly on the private sector to evaluate the role of accountants in maintaining a good corporate governance culture. It is found that the relation and interaction between the audit and audit committee is necessary to establish a good corporate governance. The author has adopted the secondary research using thematic analysis to focus on the roles and responsibilities of the accountants and auditors to find out their effectiveness in establishing corporate governance.
Responsibilities of accountants and auditors in financial institutions
Regarding the data collection process, Miller, Proctor and Fulton (2013) has showed the usage of both the primary and secondary data for conducting researches on the financial reporting and accounting for the managerial control of the organizations. They have focuses on examining the perceptions of the management and accounting professor regarding the ultimate responsibility to establish and maintain the internal control over the financial reporting in an organization. They have used both the primary and secondary data and quantitative analysis to get the findings. It is that the accounting managers are more responsible for taking the internal control or the operations and corporate governance within the organizations than the management authorities.
All these articles are aimed at providing help to the managers regarding decision making. All the business operations are highly critical and continuously changing. Accounting and auditing are very crucial among all the functions as those help the smooth functioning of the entire operations. Hence, the managers have a great amount of responsibility for running the businesses by overcoming the challenges and exploiting the opportunities to the full potential (). The financial reporting plays an important role in determining the direction and expansion of the business. All the above mentioned articles focused on the main theme of financial reporting and roles and responsibilities of the accountants and auditors in establishing and maintain corporate governance within the organizations. However, they followed different approaches. In one approach, stakeholders concerns were considered as a parameter, in another secondary data was collected and agency theory was used. Akinola (2013) showed in the context of Nigeria the accountants and auditors play the role of intermediary to establish the corporate governance in the organizations, and Almqvist et al. (2013) showed that the accountants and auditors contribute majorly in the public sector reforms by delivering efficient financial reports. All these are managerial functions, addressing different aspects of the corporate governance and accounting and auditing.
Despite all the articles following different style of research, they add values to the research topic of financial reporting, and the role and responsibilities of the accountants and auditors. Each one adds a positive value to the research issue. However, the researchers must focus on both the positive as well as negative aspects of influence of the role of the auditors and accountants in establishing the corporate governance. Along with that, the external and internal factors influencing these operations should be explored. More studies should be conducted using primary data. The different types of CSR disclosure should be considered and tested to get an in-depth idea about the relation between CSR and corporate governance. Along with that, the environmental and social influencing factors affecting the corporate governance must be considered for future studies.
Conclusion
Financial reporting is extremely crucial for any type of business. At the same time, corporate governance is also important to establish a far business process. The above mentioned papers addressed four journals for addressing the different nuances of the relationship between the roles and responsibilities of the accountants and the auditors in achieving good corporate governance in the organizational activities. The major activities of the accountants and the auditors involve the management of cash flows, making investment decisions, structuring the financial operations, and financial reporting. Establishing corporate governance in the organizations through CSR disclosure and other ethical practices in the financial department are supervised by the accountants and auditors and hence, further researches should be made to explore the external and internal influencing factors to get a new perspective on the research topic.
References
Akinola, Amos Olusola., 2013. The Roles of Accountant and Auditor in Corporate Governance in Nigeria. International Journal of Humanities and Social Science., 4, 26-38.
Almqvist, R., Grossi, G., van Helden, J. and Reichard, C., 2013. Public sector governance and accountability. Critical Perspectives on Accounting, 24(7-8), pp.479-487.
Khan, A., Muttakin, M.B. and Siddiqui, J., 2013. Corporate governance and corporate social responsibility disclosures: Evidence from an emerging economy. Journal of business ethics, 114(2), pp.207-223.
Mason, C. and Simmons, J., 2014. Embedding corporate social responsibility in corporate governance: A stakeholder systems approach. Journal of Business Ethics, 119(1), pp.77-86.
Miller, K.C., Proctor, T.Y. and Fulton, B., 2013. Teaching managerial responsibilities for internal controls: Perception gaps between accounting and management professors. Journal of Accounting Education, 31(1), pp.1-16.
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