Importance Of Program Governance For Effective Corporate Governance

The issue that has been presented in the question refers to the fact that the roles that are required for the purpose of maintaining effective governance in an organization is that of an executive or a manager who is required to look after the internal controls that has been implemented within an organization. This means that the internal controls play a significant role in the controlling of the aspect of corporate governance in an organization. This means that the different roles also include the role of an auditor who is willing to audit the quality of the corporate governance statement (Martinelli and Milosevic 2016).

                Moreover, the key roles responsibilities and accountabilities that have been carried out by the senior stakeholders are also important in developing effective program governance. This means that the stakeholders on the basis of the agency and the stakeholder theory will result in the proper establishment of the fact that the stakeholders will certainly have an opinion in regards to the development of a corporate governance statement. For instance, a veto that is given by a senior stakeholder will result in the stoppage of a project.

The factors that are needed to be considered for the purpose of ensuring that the appropriate finance and resource authorities are in place with the senior stakeholders throughout the program are as follows:

·         The appropriate finance and the resource authorities will be in place with the senior stakeholders when the development of a corporate governance statement will result in the generation of optimum amount profitability of the corporate entity.

·         the appropriate type of finance that is required will have to be decided by the executives or the other official bodies for the purpose of determining the fact as to what kind of debt should be considered for the purpose of developing the statement.

·         Moreover, it is very important to analyse the sources of funding that is required for the purpose of implementing the project. The sources of funding might be the long term or short term sources of finance. This can be carried out by comparing the paybacks or the internal rates of returns between the projects in which an estimate of the costs of the projects are made.

·         A budget should also be established and the calculation of the overall projects costs have to be estimated by the totalling of the individual activity costs

·         The management should also take an initiative to develop a variance analysis for the purpose of understanding the value of the projects.

·         The budget timelines that have been established can be carried out in a proper manner by the process of reconciliation. This can be explained by the following diagram.

The issue that has been presented in the question refers to the fact as to how it has been determined that the reliable program governance decisions in regards to the priorities that have been complicated in nature and the competitive demands on the program were made using documented and repeatable methods. This can be ensured with the help of the fact that results that have been drawn are in accordance to the results that have been drawn from the industrial benchmark of the company. Moreover, the issue of documented methods can also be found in the papers that have states the details. A RACI matrix can be used for this purpose. The acronym RACI stands for responsible, accountable, consulted and informed. Therefore, a RACI matrix consists of the decisions and the activities that should be taken by an authority for the people belonging to an organization.

It is important to carry out the comparison between the decision-making processes and outcomes that have been derived from the objectives of the program to analyse the importance of the different components of the corporate governance statement. This means that if the objectives of the corporate governance statement match with the outcomes of the same then the corporate governance that will be established in the company will result in the achieving of the desired results. Moreover, the comparison will also help in the identification of the loopholes of the management of the company. Furthermore, the use of the correct procedures will help in the attainment of the program objectives.

The program controls that help in the ensuring the program governance will make timely and effective decisions are generally the internal controls that have been established within a corporate entity. This means that the internal controls that are incorporated within the structure of a company results in the identification of the fact accounting statements to where are the loopholes of the organization and where is the scope to implement improved controls with the corporate entity. Moreover, the program controls that ensures the governance of the program. This means that the program governance will result in effective and timely decisions. The effectiveness of the controls which are being established within an organization should be timely in nature for e.g. they should allow 3-5 business days for the problem to be reviewed and changed.

The program management systems that can be used for the purpose of ensuring effective program governance is that the management of the program can be carried out with the help of the different tools and techniques that can be utilized for the purpose of developing the governance programs are the development of a systematic approach towards the program management systems. The other types of software that can be utilized for the purpose of the project refer to the fact that the management might develop a particular kind of governance program. There should be specific project management systems for the planning of the project in regards to the estimation of the costs, valuation of the projects and the selection of the right kind of staff for the project.

The program management office can help with the process of program governance and delivery by effectively leading to the development of a structure that is not effective in regards to the particular project. This means that an effective program management will result in the development of an effective corporate governance program that will effectively delivering of the desired products. This means that the management of the program aims to determine the quality of the product that it delivers. In case of the process of project management, the support of the admin who is at the top of a project is very important. The delivery of the scheduling mechanisms is another important part of the program, which has to be considered and carried out properly. Moreover, the issues that are related to business management has to be carefully dealt with by the member of the project management group.

At the time of designing the program governance, the compliance requirements that should be utilized are that the nature of the program should be defined. The other factors include the determination of the aspect or the objective of the program. Moreover, at the time of designing the program governance the factors that should be incorporated are that the corporate governance statement should be free of any kind of error or misstatement (Hutchings and Shipway 2017). The financial/ IT/ legal compliance that is mandatory for all corporate entities to maintain should be strictly adhered to and Several work products specifically related to an individual program effort and should be developed, agreed upon, during the definition of the business strategy. These products describe the results of strategic work efforts to define the program and justify proceeding with it. They provide initial links to the business strategy and help to frame the mobilization effort. These products should include:

• IT goals and strategy
• Program capital and expenses budget
• Program benefits definition
• Program outline
• Candidate projects identification
• Program mobilization plan
• Consulting and staffing agreements

A business strategy review should be part of the overall mobilization process for both the program and its constituent projects, to check the quality of the business strategy input and to determine readiness to proceed.

The records that are required for the for the purpose of maintaining the corporate governance statement refers to the essential documents of the corporate entity whose corporate governance program is being designed. This means that the documents are vital in the preparation of the program and should be maintained securely for the purpose of ensuring appropriate access and currency of information. This can be achieved by the proper installation of security system within the corporate organization along with the proper accessory passwords and other data back -up techniques and tools.

The steps that should be incorporated for the purpose of rectifying a compliance issue in regards to a program refers to the fact that the corporate governance statement or the governance program should be prepared in such a way that the rectification of the compliance issue has been carried out in the desired way. Moreover, the other factors that have been included are that the governance statement that affects the delivery of the program should be effectively amended.  The actions that should be taken for a compliance issue depends on the level of non-compliance that has been carried out by the staff or other members of the organization.

The issue that has been presented in the question is that the consequences that can occur if the aspect of program governance fails to act in the most appropriate way. The particular happening that takes place, might result in the development of the corporate standards that are not right or has been falling upon the employees of the organization. This means that the different standards that have been utilized might result in the ruining of the compliance issue in case the program governance does not act in an ethical or appropriate manner. In case of a breach in the ethical standards of the program, the consequences can be as severe as the cancelling of the license of a project.

The procedures that follow outline the processes for managing actual or potential breaches of the company’s compliance obligations. These procedures must be read in conjunction with the Compliance Management Framework – Governing Policy and other related procedures.

The intent of these procedures is to:

o   provide a systematic process for the reporting and investigation of compliance breaches or potential breaches so they can be appropriately addressed;

o   reinforce the importance of compliance, so that all staff members are encouraged to proactively raise compliance issues as soon as possible and address any weaknesses in the control environment

o   enable the gathering of information to facilitate monitoring and reporting of compliance performance within the company and

o   ensure that no staff member is penalized or disadvantaged because of reporting a compliance breach and that repercussions of breaches themselves are determined on a case-by-case basis.

Procedure steps and actions

o   It is essential that all parties involved in breach reporting, investigation and rectification act in good faith to obtain a satisfactory outcome. Good faith includes acting sincerely, without malice and being truthful.

o   No blame should be attached to the reporting of accidental breaches or those identifying process errors.

o   It should be noted that staff committing deliberate or negligent breaches may be subject to the company’s disciplinary processes or regulatory/criminal actions (where applicable and/or appropriate).

The management and the governance support that the programs need to have refer to the fact that the governance needs in goods should be properly defined and clarified for the purpose of defining the program. Moreover, the management and the governance support that should be included for developing a corporate governance statement refer to the fact that the management of the organization should be aware about the needs and particulars of the corporate entity. This means that the governance support that the program should receive is that the program should be defined in the nature of the objectives that it aims to fulfil. The senior stakeholders or the management of a corporate entity is also skilled at the process of strategic reporting that is effective in the selection of the projects. Moreover, the section of the projects can be carried out with the help of the different techniques like NPV and other payback methods. (Regezi et al. 2016).

The steps that are needed to be incorporated for the purpose of establishment of the skill development support system refer to the fact that the program personnel should meet up to the needs of the program. This means that the program personnel should be skilled enough in order to understand and carry out the requirements of the program. Moreover, the other requirements include that the program personnel should be a good communicator. This is due to the fact that the skill development system has been designed in such a way that it should be explained to the different members of the organization. This means that the skill development support system should be established in such a way that the program personnel get to understand and know about the developments that have been incorporated. It should be noted here that it is also very important to train the staff to enhance their degree of performance and keep up with the latest changes to the system and procedure.

The factors that are needed to be considered for the designing of the program knowledge management system that will help in the supporting of the current and the future organizational needs is that the development of the program, should be carried out in a particular way. This means that the information that has been delivered by it is easy to understand and undertake.  Moreover, the other considerations include the conveying of the information should be simple and in accordance to the needs of the organization and should be delivered via email and weekly or monthly meets.

Financial probity refers to the standard of ethics that have been maintained for the purpose of ensuring the fact that whether the financial statements of the corporate entity have been prepared in accordance to the delegated standards of ethics. Moreover, the other considerations that have been included refer to the fact that the aspect financial probity is a primary requirement in the different corporate organizations and is an important topic for the purpose of ensuring the fact that the audit of the financial statements have been carried out with the required number of ethical standards.

The principles of accounting and financial systems refer to the fact that the principles that have been adhered to while preparing the financial statements of the corporate organization. The management of the corporate entities takes an optimum amount of initiative for the purpose of developing the accounting standards that should be adhered to while preparing the financial statements. The accounting regulatory bodies of the different countries have developed these accounting standards (Rashid 2017). This means that the principles of accounting and financial systems are developed by the accounting regulatory bodies on the basis of the regulatory settings and other social, political or economic settings of the country to which the accounting body belongs to. These principles like the double entry principle states that each entry should be made twice in order to cancel out their effects. These accounting principles act as the base of the subject.

INCOTERM refers to the particular process that should be incorporated by a seller of a particular good that needs to be transported. This means that the seller has the responsibility to take up the cost in regards to the transporting of the goods and also is responsible for the insurance in regards to the shipping of the goods to the particular destination point. This means that the seller falls under the effect of the term, INCOTERM. Moreover, it has been founded out that the seller has to bear the risk of carrying the product and also has to take up the responsibility of insurance of the goods that have to be transferred to the point of destination.

The trade practices act refers to that particular act that has been defined as an Act that will result in the providence of the operation of the economic system does not result in the concentration of economic power to the common detriment. This is for the control of monopolies, for the prohibition of monopolistic and restrictive trade practices and for matters connected therewith or incidental thereto. Therefore, this is known accounting statements the Trade Practices Act

The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations. At its heart are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations and ratified in their parliaments. The goal is to help producers of goods and services, exporters, and importers conduct their business.

Bilateral trade agreements (BTAs) and regional trade agreements (RTAs) are an important social phenomenon in the world today. … In this age of globalization, the world trading order is based on the World Trade Organization (WTO) Agreement, which is a multilateral treaty.

You must keep records of most transactions in English for five years after you prepared or obtained them, or five years after you completed the transactions or acts to which they relate, whichever is the later. clarifies the record-keeping obligations of small businesses, particularly for cash transactions. If you have losses, you should generally keep records for four years from the year of income when a tax loss is fully deducted or if you have applied a net capital loss, you should generally keep your records of the CGT event that resulted in the loss until the end of any period of review for the income year in which the capital loss is fully applied. Penalties can apply if you do not keep the records for the period required.

We are helping small business operators to meet their record-keeping obligations by reviewing their record-keeping practices. These reviews start with a phone call or a brief visit to the business premises. You can ask questions and an interview is arranged for a later date.

Some of the more significant record-keeping problems we have identified are failure to:

• record cash income and expenditure
• account for personal drawings
• record goods for your own use
• separate private expenses from business expenses
• keep valid tax invoices for creditable acquisitions when registered for the goods and services tax (GST)
• keep adequate stock records
• keep adequate records to substantiate motor vehicle claims.

The statements that have been discussed in the particular question are that there have been several statements. The statements are as follows:

·         It is a detailed plan

·         It is a management tool

·         It provides many of the performance targets used in case of responsibility accounting

·         It has been prepared on historical basis

·         It results in the identification of the certain operating and financial targets.

The particular statement that has not been true is the statement is that the budgets result in the providence of the performance targets that has been used in case of responsibility accounting. This is because in case of budgets there have been no link between the aspect of responsibility accounting and the standard upon which the budgets have been prepared. There is also a link between the budgets that are prepared and the responsibility with which such a task has been carried out. In other words, a responsibility budget is a budget that companies make for the expenses and revenues that are controlled by a specific manager. Since not all costs can controlled by managers, it makes sense to make a budget specifically charting the expenses that managers can control.

Budgets help businesses track and manage their resources. Businesses use a variety of budgets to measure their spending and develop effective strategies for maximizing their assets and revenues. The following types of budgets are commonly used by businesses

A master budget is an aggregate of a company’s individual budgets designed to present a complete picture of its financial activity and health. The master budget combines factors like sales, operating expenses, assets, and income streams to allow companies to establish goals and evaluate their overall performance, as well as that of individual cost centres within the organization. Master budgets are often used in larger companies to keep all individual managers aligned.
An operating budget is a forecast and analysis of projected income and expenses over the course of a specified time period. To create an accurate picture, operating budgets must account for factors such as sales, production, labour costs, materials costs, overhead, manufacturing costs, and administrative expenses. Operating budgets are generally created on a weekly, monthly, or yearly basis. A manager might compare these reports month after month to see if a company is overspending on supplies (ALEXANDER 2016).

A cash flow budget is a means of projecting how and when cash comes in and flows out of a business within a specified time period. It can be useful in helping a company determine whether it’s managing its cash wisely. Cash flow budgets consider factors such as accounts payable and accounts receivable to assess whether a company has ample cash on hand to continue operating, the extent to which it is using its cash productively, and its likelihood of generating cash in the near future. A construction company, for example, might use its cash flow budget to determine whether it can start a new building project before getting paid for the work it has in progress.

A financial budget presents a company’s strategy for managing its assets, cash flow, income, and expenses. A financial budget is used to establish a picture of a company’s financial health and present a comprehensive overview of its spending relative to revenues from core operations. A software company, for instance, might use its financial budget to determine its value in the context of a public stock offering or merger. A static budget is a fixed budget that remains unaltered regardless of changes in factors such as sales volume or revenue. A plumbing supply company, for example, might have a static budget in place each year for warehousing and storage, regardless of how much inventory it moves in and out due to increased or decreased sales.

The information that is required refers to the preparation of the budget on the basis of the historical cost that has been incorporated by the corporate entity in the preparation of the different kinds of budgets. The other information that is required is the costs of the different processes and the other expenditures both in the nature of incurred or estimated.

Financial term

Brief description

Capital investment

Capital investment refers to the type of investment that is used in the initiation or starting of a business.

Capital expenditure

Capital expenditure on the other hand refers to the expenditure that has been incorporated for the carrying out of the business.

Cash flow

Cash flow on the other hand refers to the inflow or the outflow of cash from the business of a corporate entity.

Break even

Breakeven point refers to the point in which the total sales equalize the total expenditure that has been carried out by a corporate entity.

Gross profit

Gross profit is the profit a company makes after deducting the costs associated with making and selling its products, or the costs associated with providing its services. Gross profit will appear on a company’s income statement and can be calculated with this formula: Gross profit = Revenue – Cost of Goods Sold.

Risk management

Risk management refers to the strategies that have been incorporated by a corporate entity for the purpose of managing the risks.

The financial reporting cycles that are relevant to the industry are annual in nature. It must be noted here that the other industries also pose the similar periodical cycles for the carrying out of the financial proceedings. This means that the annual cycles are not a rare occurrence. However, the seasonal industries might make use of the quarterly cycles.

As an accountant to a large production firm, John looks at a proposal to purchase a $900,000 stamping machine to increase output.  He determines the following information:

•          The new machine can do 100 more units per hour

•          The 4 workers currently doing the stamping can be replaced

•          The units will be higher quality because they are more uniform

John calculates the selling price of the 100 units per hour multiplied by the number of production hours per month, plus adding the 3% that aren’t rejected due to the increased quality of the machine output vs. manual stamping.  He adds the monthly wages of the workers that are no longer required and in the end, you have a healthy benefit calculated.

John then calculates the monthly cost of the machine by dividing the purchase price by 12 months per year and divide that by 10 years the machine should last.  The manufacturer’s specs state the power consumption of the machine and John calculates the cost of that as well.  He subtracts the total cost figure from the total benefit figure and this shows a healthy benefit calculated.

John hasn’t done adequate job in calculating costs.

John is missing machine’s

·         annual maintenance

·         cost of capital

plus, if the machine stops working for a day how much will that cost him because he will be firing all his manual workers.

Machine 1:

·         Investment Cost: $50,000

·         Expected Lifespan: 3 years

·         Annual Maintenance: $13,000

Cost of Capital = 5%

Machine 2:

·         Investment Cost: $150,000

·         Expected Lifespan: 8 years

·         Annual Maintenance: $7,500

Equivalent Annual Cost

Particulars

Machine 1

Machine 2

Cost of Machine

$50,000.00

$150,000.00

term (n)

3

8

Cost of Capital

5%

5%

A(t,r)

2.723248

6.46321276

Annual Maintenance

$13,000.00

$7,500.00

Equivalent Annual Cost

$31,360.43

$30,708.27

A couple of surprises were in store for Zootz Kitchen Bar when it joined a new industry sustainability and waste management program in Adelaide.  First was a realisation of just how much food waste the restaurant was sending to landfill and the second was how quickly it could improve its recycling performance. 

The Henley Beach restaurant is part of a new partnership between Zero Waste SA and Restaurant & Catering SA (RCSA) to improve sustainability in the hospitality sector.

Zootz Kitchen Bar was given specialist advice under Zero Waste SA’s Industry Program to help it implement new waste management systems and to qualify for Green Table Australia certification.

You have been assigned as Zero Waste’s Program Manager to work with Zootz and RCSA with the program vision of attaining Green Table accreditation for Zootz.