| |
| |
| |
Private Enterprise and Public Trust | |
| |
| |
| |
The Free Market System and Business | |
| |
| |
Introduction | |
| |
| |
Primary Objectives | |
| |
| |
The Free Enterprise System and Capital Markets | |
| |
| |
Public Trust and Investor Confidence | |
| |
| |
The Role and Responsibility of Business in Society | |
| |
| |
The First Tier: Investors | |
| |
| |
The Second Tier: Creditors | |
| |
| |
The Third Tier: Others | |
| |
| |
The Role of Financial Information in the Capital Markets | |
| |
| |
Introduction to Corporate Governance | |
| |
| |
Corporate Culture and Integrity | |
| |
| |
Corporate Accountability | |
| |
| |
Introduction to Business Ethics | |
| |
| |
Classroom Implications of this Book | |
| |
| |
Summary | |
| |
| |
Key Terms | |
| |
| |
Review Questions | |
| |
| |
Discussion Questions | |
| |
| |
Notes | |
| |
| |
| |
Corporate Governance | |
| |
| |
Introduction | |
| |
| |
Primary Objectives | |
| |
| |
Definition of Corporate Governance | |
| |
| |
Aspects of Corporate Governance | |
| |
| |
Shareholder Aspect | |
| |
| |
Stakeholder Aspect | |
| |
| |
Integrated Aspect | |
| |
| |
Corporate Governance Structure | |
| |
| |
Corporate Governance Principles | |
| |
| |
Corporate Governance Functions | |
| |
| |
Corporate Governance Mechanisms | |
| |
| |
Sources of Corporate Governance | |
| |
| |
Corporate Laws | |
| |
| |
The Federal Securities Laws | |
| |
| |
Listing Standards | |
| |
| |
Best Practices | |
| |
| |
Corporate Governance Reforms | |
| |
| |
Sarbanes-Oxley Act of 2002 | |
| |
| |
Corporate Governance Rating | |
| |
| |
Corporate Governance Reporting | |
| |
| |
Global Convergence in Corporate Governance | |
| |
| |
Differences between U.S. and European Models of Corporate Governance | |
| |
| |
Summary | |
| |
| |
Key Terms | |
| |
| |
Review Questions | |
| |
| |
Discussion Questions | |
| |
| |
Notes | |
| |
| |
| |
Introduction to Business Ethics | |
| |
| |
Introduction | |
| |
| |
Primary Objectives | |
| |
| |
Ethical Theories | |
| |
| |
Ethics in the Workplace | |
| |
| |
Business Ethics | |
| |
| |
Corporate Culture | |
| |
| |
Incentives | |
| |
| |
Opportunity | |
| |
| |
Choices | |
| |
| |
Triangle of Business Ethics | |
| |
| |
Ethics Sensitivity | |
| |
| |
Ethics Incentives | |
| |
| |
Ethical Behavior | |
| |
| |
SEC Rules on Corporate Code of Ethics | |
| |
| |
Listing Standards | |
| |
| |
Ethics Teaching in Business Schools | |
| |
| |
Ethics in Institutions of Higher Education | |
| |
| |
Professional Ethics | |
| |
| |
Reporting Business Ethics and Conduct | |
| |
| |
Financial Reporting Integrity | |
| |
| |
Organizational Drivers of Integrity in Reporting | |
| |
| |
Summary | |
| |
| |
Key Terms | |
| |
| |
Review Questions | |
| |
| |
Discussion Questions | |
| |
| |
Notes | |
| |
| |
| |
Roles and Responsibilities of Corporate Governance Participants | |
| |
| |
| |
Board of Directors' Roles and Responsibilities | |
| |
| |
Introduction | |
| |
| |
Primary Objectives | |
| |
| |
Role of the Board of Directors | |
| |
| |
Fiduciary Duties of the Board of Directors | |
| |
| |
Duty of Due Care | |
| |
| |
Duty of Loyalty | |
| |
| |
Duty of Good Faith | |
| |
| |
Duty to Promote Success | |
| |
| |
Duty to Exercise Diligence, Independent Judgment, and Skill | |
| |
| |
Duty to Avoid Conflicts of Interest | |
| |
| |
Fiduciary Duties and Business Judgment Rules | |
| |
| |
Board Committees | |
| |
| |
Audit Committee | |
| |
| |
Compensation Committee | |
| |
| |
Governance Committee | |
| |
| |
Nominating Committee | |
| |
| |
Disclosure Committees | |
| |
| |
Special Committee | |
| |
| |
Board Models | |
| |
| |
One-Tier Board Model | |
| |
| |
Two-Tier Board Model | |
| |
| |
Modern Board Model | |
| |
| |
Board Characteristics | |
| |
| |
Board Leadership | |
| |
| |
CEO Duality | |
| |
| |
Lead Director | |
| |
| |
Board Composition | |
| |
| |
Board Authority | |
| |
| |
Responsibilities | |
| |
| |
Resources | |
| |
| |
Board Independence | |
| |
| |
Director Compensation | |
| |
| |
Board Selection | |
| |
| |
Director Education and Evaluation | |
| |
| |
Board Accountability | |
| |
| |
Effective Corporate Boards | |
| |
| |
Director Liability | |
| |
| |
Summary | |
| |
| |
Key Terms | |
| |
| |
Review Questions | |
| |
| |
Discussion Questions | |
| |
| |
Notes | |
| |
| |
| |
Board Committee Roles and Responsibilities | |
| |
| |
Introduction | |
| |
| |
Primary Objectives | |
| |
| |
Relevance of Board Committees | |
| |
| |
Audit Committee | |
| |
| |
Definition of the Audit Committee | |
| |
| |
Audit Committee Relationships with Other Corporate Governance Participants | |
| |
| |
Historical Perspectives on Audit Committees | |
| |
| |
Audit Committee Principles | |
| |
| |
Audit Committee Composition | |
| |
| |
Audit Committee Size | |
| |
| |
Audit Committee Independence | |
| |
| |
Member Qualifications | |
| |
| |
Audit Committee Authority/Resources | |
| |
| |
Audit Committee Responsibility | |
| |
| |
Audit Committee Meetings | |
| |
| |
Audit Committee Agenda | |
| |
| |
Audit Committee Reporting | |
| |
| |
Legal Liability of Audit Committees | |
| |
| |
Evaluation of Audit Committee Effectiveness | |
| |
| |
Audit Committee Evaluation of External Auditors | |
| |
| |
Compensation Committee | |
| |
| |
Structure | |
| |
| |
Responsibilities | |
| |
| |
Proxy Statement Disclosure | |
| |
| |
Compensation Committee Responsibilities | |
| |
| |
Corporate Governance Committee | |
| |
| |
Responsibilities of the Corporate Governance Committee | |
| |
| |
Corporate Governance Reporting/Disclosures | |
| |
| |
Nominating Committee | |
| |
| |
Responsibilities of the Nominating Committee | |
| |
| |
Selection, Nomination, and Election of New Directors | |
| |
| |
Election of Directors | |
| |
| |
Reelection of Incumbent Directors | |
| |
| |
Succession Planning Process | |
| |
| |
Nominating Committee Disclosures | |
| |
| |
Other Board Standing Committees | |
| |
| |
Summary | |
| |
| |
Key Terms | |
| |
| |
Review Questions | |
| |
| |
Discussion Questions | |
| |
| |
Notes | |
| |
| |
| |
Roles and Responsibilities of Management | |
| |
| |
Introduction | |
| |
| |
Primary Objectives | |
| |
| |
Management Responsibilities | |
| |
| |
Operating Process | |
| |
| |
Financial Reporting Process | |
| |
| |
Compliance Process | |
| |
| |
Corporate Officers | |
| |
| |
Chief Executive Officer | |
| |
| |
Chief Financial Officer | |
| |
| |
Corporate Development Officer | |
| |
| |
Chief Risk Officer | |
| |
| |
Chief Internal Control Officer | |
| |
| |
Executive Compensation | |
| |
| |
Components of Executive Compensation | |
| |
| |
Executive Compensation Disclosure | |
| |
| |
Financial Reporting Requirements | |
| |
| |
Small Reporting Companies | |
| |
| |
Financial Reporting Challenges | |
| |
| |
Off Balance Sheet Arrangements Disclosures | |
| |
| |
Aggregate Contractual Commitments | |
| |
| |
Disclosure of Critical Accounting Policies | |
| |
| |
Initial Adoption of Accounting Policies | |
| |
| |
Disclosure of Changes in Existing Accounting Policies | |
| |
| |
Acceleration of Periodic Report Filing Dates and Real-Time Disclosures | |
| |
| |
Non-GAAP Financial Measures | |
| |
| |
Voluntary Changes in Accounting Policies | |
| |
| |
Accounting Pensions and Other Postemployment Benefits | |
| |
| |
Principles-Based versus Rules-Based Accounting Standards | |
| |
| |
Conceptual Framework for Financial Reporting | |
| |
| |
Earnings Management | |
| |
| |
Financial Restatements | |
| |
| |
Convergence in Financial Reporting | |
| |
| |
Internal Control Reporting and Executive Certifications | |
| |
| |
Internal Control Over Financial Reporting | |
| |
| |
Internal Control Evaluations | |
| |
| |
Section 404 Costs | |
| |
| |
Benefits of Section 404 Compliance | |
| |
| |
Sustainable Section 404 Compliance | |
| |
| |
SEC Interpretive Guidance on ICFR | |
| |
| |
Adequacy | |
| |
| |
Effectiveness | |
| |
| |
Entity-Level Controls | |
| |
| |
Ongoing Monitoring | |
| |
| |
Fraud Risk Considerations | |
| |
| |
Amendments to SEC Rules | |
| |
| |
Enterprise Risk Management | |
| |
| |
Tax Accounting | |
| |
| |
Summary | |
| |
| |
Key Terms | |
| |
| |
Review Questions | |
| |
| |
Discussion Questions | |
| |
| |
Notes | |
| |
| |
| |
Regulatory Bodies, Standard Setters, and Best Practices | |
| |
| |
Introduction | |
| |
| |
Primary Objectives | |
| |
| |
Regulations | |
| |
| |
The Sarbanes-Oxley Act of 2002 | |
| |
| |
Corporate Governance Provisions | |
| |
| |
Financial Reporting Provisions | |
| |
| |
Audit Function Provisions | |
| |
| |
Enforcement of Federal Securities Laws | |
| |
| |
Provisions Addressing Conduct of Other Individuals | |
| |
| |
Evaluation of the Sarbanes-Oxley Act | |
| |
| |
Global Reach of SOX | |
| |
| |
Securities and Exchange Commission | |
| |
| |
SEC Activities | |
| |
| |
Public Company Accounting Oversight Board | |
| |
| |
PCAOB Responsibilities | |
| |
| |
PCAOB Standard-Setting Process | |
| |
| |
Federal Sentencing Guidelines for Organizations | |
| |
| |
American Institute of Certified Public Accountants | |
| |
| |
AICPA Roles in the Post-SOX Era | |
| |
| |
Financial Accounting Standards Board | |
| |
| |
Government Accounting Standards Board | |
| |
| |
International Federation of Accountants | |
| |
| |
Committee of European Securities Regulators | |
| |
| |
State Influence on Corporate Governance | |
| |
| |
Corporate Governance and Courts | |
| |
| |
Corporate Governance and Self-Regulatory Organizations | |
| |
| |
Best Practices | |
| |
| |
The Conference Board | |
| |
| |
American Law Institute | |
| |
| |
American Bar Association | |
| |
| |
Institutional Investors | |
| |
| |
Council of Institutional Investors | |
| |
| |
National Association of Corporate Directors | |
| |
| |
Business Roundtable | |
| |
| |
Public Pension Funds | |
| |
| |
Summary | |
| |
| |
Key Terms | |
| |
| |
Review Questions | |
| |
| |
Discussion Questions | |
| |
| |
Notes | |
| |
| |
| |
Internal Auditors' Roles and Responsibilities | |
| |
| |
Introduction | |
| |
| |
Primary Objectives | |
| |
| |
Internal Auditing Function and Corporate Governance | |
| |
| |
Internal Auditors as Assurance Providers | |
| |
| |
Internal Auditors as Consultants | |
| |
| |
Trend and Relevance of Internal Auditors | |
| |
| |
Authorities and Responsibilities of Internal Auditors | |
| |
| |
Authority | |
| |
| |
Responsibility | |
| |
| |
Internal Audit Outsourcing | |
| |
| |
Audit Committee Relationship with Internal Auditor | |
| |
| |
Internal Auditors' Role in Internal Control | |
| |
| |
Institute of Internal Auditors | |
| |
| |
Determinants of Effective Internal Audit | |
| |
| |
Best Practices | |
| |
| |
Internal Audit Performance | |
| |
| |
Internal Audit Framework | |
| |
| |
Internal Auditing Education | |
| |
| |
The Internal Audit Opinion on Internal Controls | |
| |
| |
Summary | |
| |
| |
Key Terms | |
| |
| |
Review Questions | |
| |
| |
Discussion Questions | |
| |
| |
Notes | |
| |
| |
| |
External Auditors' Roles and Responsibilities | |
| |
| |
Introduction | |
| |
| |
Primary Objectives | |
| |
| |
External Auditing and Corporate Governance | |
| |
| |
External Auditor Responsibilities | |
| |
| |
Auditor Competency | |
| |
| |
Audit Failures and Audit Quality | |
| |
| |
Public Company Accounting Oversight Board | |
| |
| |
Registration and Inspection of Public Accounting Firms | |
| |
| |
PCAOB Auditing Standards | |
| |
| |
PCAOB Enforcement Investigations | |
| |
| |
Audit Committee Oversight of External Auditors | |
| |
| |
Appointment, Compensation, and Retention of Auditors | |
| |
| |
Preapproval of Audit Services and Permissible Nonaudit Services | |
| |
| |
Review of Independent Auditor Plan for the Integrated Audit | |
| |
| |
Review and Discussion of Financial Reports | |
| |
| |
Monitoring the Auditor's Independence | |
| |
| |
Auditor Rotation Requirement | |
| |
| |
Independent Auditor Communication with the Audit Committee | |
| |
| |
Auditor Independence | |
| |
| |
Consolidation and Competition in Public Accounting Firms | |
| |
| |
Integrated Audit Approach | |
| |
| |
Audit Strategy | |
| |
| |
Audit of Defined Benefit Pensions | |
| |
| |
Auditor Liability Limitation Agreements | |
| |
| |
Summary | |
| |
| |
Key Terms | |
| |
| |
Review Questions | |
| |
| |
Discussion Questions | |
| |
| |
Notes | |
| |
| |
| |
Stakeholders' Roles and Responsibilities | |
| |
| |
Introduction | |
| |
| |
Primary Objectives | |
| |
| |
Shareholders | |
| |
| |
Shareholder Monitoring | |
| |
| |
Shareholder Proxy Process | |
| |
| |
Security Class Actions | |
| |
| |
Institutional Investors | |
| |
| |
Institutional Investors' Monitoring | |
| |
| |
Governance of Institutional Investors | |
| |
| |
Mutual Funds | |
| |
| |
Improving the Oversight Function | |
| |
| |
Chief Compliance Officer | |
| |
| |
Code of Ethics | |
| |
| |
Hedge Funds | |
| |
| |
Investor Activists | |
| |
| |
Employee Monitoring | |
| |
| |
Employee Ownership | |
| |
| |
Employee Roles in Corporate Governance | |
| |
| |
Employee Class Actions | |
| |
| |
Summary | |
| |
| |
Key Terms | |
| |
| |
Review Questions | |
| |
| |
Discussion Questions | |
| |
| |
Notes | |
| |
| |
| |
Roles and Responsibilities of Other Corporate Governance Participants | |
| |
| |
Introduction | |
| |
| |
Primary Objectives | |
| |
| |
Legal Counsel | |
| |
| |
Communication with Legal Counsel | |
| |
| |
SEC Rules of Professional Conduct for Lawyers | |
| |
| |
Responsibilities of Legal Counsel | |
| |
| |
Financial Advisors | |
| |
| |
Securities Analysts | |
| |
| |
| |
Information Flow | |
| |
| |
| |
Analyst Conduct | |
| |
| |
| |
Corporate Communication and Access | |
| |
| |
| |
Reviewing Analyst Reports or Models | |
| |
| |
| |
Issuer-Paid Research Reports | |
| |
| |
Investment Banks | |
| |
| |
Summary | |
| |
| |
Key Terms | |
| |
| |
Review Questions | |
| |
| |
Discussion Questions | |
| |
| |
Notes | |
| |
| |
| |
Contemporary Issues in Business Ethics and Corporate Governance | |
| |
| |
| |
Technology and Corporate Governance | |
| |
| |
Introduction | |
| |
| |
Primary Objectives | |
| |
| |
Information Technology | |
| |
| |
Cybercompany Model | |
| |
| |
Electronic Communication with Shareholders | |
| |
| |
Electronic Commerce | |
| |
| |
Electronic Financial Reporting | |
| |
| |
Extensible Business Reporting Language | |
| |
| |
Costs and Benefits of XBRL | |
| |
| |
XBRL Application | |
| |
| |
Future of XBRL | |
| |
| |
Continuous Auditing | |
| |
| |
Technology Solutions | |
| |
| |
Summary | |
| |
| |
Key Terms | |
| |
| |
Review Questions | |
| |
| |
Discussion Questions | |
| |
| |
Notes | |
| |
| |
| |
Corporate Governance in Private and Not-for-Profit Organizations | |
| |
| |
Introduction | |
| |
| |
Primary Objectives | |
| |
| |
Types of NPOs | |
| |
| |
State and Local Governments | |
| |
| |
Health Care Organizations | |
| |
| |
Colleges and Universities | |
| |
| |
Charitable Organizations | |
| |
| |
Purpose and Role of NPOs | |
| |
| |
Public Trust in NPOs | |
| |
| |
Governance of NPOs | |
| |
| |
Governance of Institutions of Higher Education | |
| |
| |
Ethics in Institutions of Higher Education | |
| |
| |
Applicability of Corporate Governance Reforms to Private Companies and NPOs | |
| |
| |
Governance Structure of NPOs | |
| |
| |
Governance Principles | |
| |
| |
Governance Mechanisms | |
| |
| |
Oversight Function of NPOs | |
| |
| |
Duties of the Board of Directors/Trustees | |
| |
| |
Board Committees | |
| |
| |
Responsibilities of the Board of Directors/Trustees | |
| |
| |
Attributes of Board Members | |
| |
| |
Audit Committees of NPOs | |
| |
| |
Best Practices | |
| |
| |
Internal Control in NPOs | |
| |
| |
Summary | |
| |
| |
Key Terms | |
| |
| |
Review Questions | |
| |
| |
Discussion Questions | |
| |
| |
Notes | |
| |
| |
| |
Corporate Governance in Transition | |
| |
| |
Introduction | |
| |
| |
Primary Objectives | |
| |
| |
Historical Perspective of Corporate Governance | |
| |
| |
Corporate Governance: A Global Perspective | |
| |
| |
Corporate Governance in the United States | |
| |
| |
Corporate Governance in the United Kingdom | |
| |
| |
Corporate Governance in Germany | |
| |
| |
Corporate Governance in Japan | |
| |
| |
Corporate Governance in Other Countries | |
| |
| |
Convergence in Corporate Governance | |
| |
| |
Corporate Governance in Multinational Corporations | |
| |
| |
Summary | |
| |
| |
Key Terms | |
| |
| |
Review Questions | |
| |
| |
Discussion Questions | |
| |
| |
Notes | |
| |
| |
| |
Emerging Issues in Corporate Governance | |
| |
| |
Introduction | |
| |
| |
Primary Objectives | |
| |
| |
Investor Confidence and Global Financial Markets | |
| |
| |
Global Financial Markets | |
| |
| |
Global Corporate Governance | |
| |
| |
Corporate Governance Reporting | |
| |
| |
Accountability: The New Business Imperative | |
| |
| |
Social, Environmental, and Ethics Performance | |
| |
| |
Corporate Social Responsibility | |
| |
| |
Environmental Performance | |
| |
| |
Ethics Performance | |
| |
| |
Shareholder Challenging Issues | |
| |
| |
Nomination Process | |
| |
| |
Voting System | |
| |
| |
Proxy Statements | |
| |
| |
Challenges Facing Directors | |
| |
| |
Director Accountability and Personal Liability | |
| |
| |
Separation of the Chairperson of the Board and CEO Roles | |
| |
| |
Director Compensation and Stock Ownership | |
| |
| |
Executive Compensation | |
| |
| |
Unresolved Director Issues | |
| |
| |
SOX Compliance Challenges | |
| |
| |
Financial Reporting Challenges | |
| |
| |
Financial Restatements | |
| |
| |
Enhanced Business Reporting | |
| |
| |
Stock Options Accounting | |
| |
| |
Antifraud Program and Practices | |
| |
| |
Global Financial Reporting Standards | |
| |
| |
Future of Financial Reporting | |
| |
| |
Pension and OPEB Plans Accounting | |
| |
| |
The Use of Derivatives Speculation | |
| |
| |
Enterprise Risk Management | |
| |
| |
XBRL-Generated Financial Reports | |
| |
| |
Emerging Auditing Issues | |
| |
| |
Auditor Independence | |
| |
| |
Auditor Changes | |
| |
| |
Engagement Letters | |
| |
| |
Audit Failure | |
| |
| |
Integrated Audit Approach | |
| |
| |
Concentration of and Competition in Public Accounting Firms | |
| |
| |
Continuous Auditing | |
| |
| |
Confirmations | |
| |
| |
Audit Report | |
| |
| |
Auditor Liability | |
| |
| |
Audit Implications of Convergence to IFRS | |
| |
| |
Summary | |
| |
| |
Key Terms | |
| |
| |
Review Questions | |
| |
| |
Discussion Questions | |
| |
| |
Notes | |
| |
| |
Index | |