Description
Book SynopsisThe time has come for business schools--supported by AACSB International--to renew and revitalize their commitment to the centrality of ethical responsibility at both the individual and corporate levels in preparing business leaders for the twenty-first century.
Trade Review"This comprehensive overview covers the theoretical and practical aspects of corporate governance and ethics." Ethical Corporation Magazine June 2008
Table of ContentsPart One Private Enterprise and Public Trust 1
Chapter 1. The Free Market System and Business 3
Introduction 3
The Free Enterprise System and Capital Markets 4
Public Trust and Investor Confidence 6
The Role and Responsibility of Business in Society 7
The Role of Financial Information in the Capital Markets 11
Introduction to Corporate Governance 16
Introduction to Business Ethics 20
Classroom Implications of this Book 22
Summary 23
Key Terms 24
Review Questions 24
Discussion Questions 25
Notes 26
Chapter 2. Corporate Governance 28
Introduction 28
Definition of Corporate Governance 29
Aspects of Corporate Governance 30
Corporate Governance Structure 34
Sources of Corporate Governance 44
Corporate Governance Reforms 45
Sarbanes-Oxley Act of 2002 46
Corporate Governance Rating 49
Corporate Governance Reporting 50
Global Convergence in Corporate Governance 54
Summary 56
Key Terms 57
Review Questions 58
Discussion Questions 58
Notes 59
Chapter 3. Introduction to Business Ethics 60
Introduction 60
Ethical Theories 61
Ethics in the Workplace 62
Business Ethics 64
Triangle of Business Ethics 66
Ethics Teaching in Business Schools 71
Professional Ethics 74
Reporting Business Ethics and Conduct 75
Financial Reporting Integrity 78
Summary 82
Key Terms 83
Review Questions 83
Discussion Questions 83
Notes 84
Part Two Roles and Responsibilities of Corporate Governance Participants 87
Chapter 4. Board of Directors’ Roles and Responsibilities 89
Introduction 89
Role of the Board of Directors 90
Fiduciary Duties of the Board of Directors 93
Board Committees 96
Board Models 98
Board Characteristics 100
Board Selection 107
Director Education and Evaluation 108
Board Accountability 108
Effective Corporate Boards 110
Director Liability 111
Summary 113
Key Terms 115
Review Questions 115
Discussion Questions 115
Notes 116
Chapter 5. Board Committee Roles and Responsibilities 117
Introduction 117
Relevance of Board Committees 118
Audit Committee 118
Compensation Committee 133
Corporate Governance Committee 139
Nominating Committee 142
Other Board Standing Committees 147
Summary 147
Key Terms 149
Review Questions 149
Discussion Questions 149
Notes 150
Chapter 6. Roles and Responsibilities of Management 152
Introduction 152
Management Responsibilities 153
Corporate Officers 155
Executive Compensation 159
Financial Reporting Requirements 161
Financial Reporting Challenges 164
Internal Control Reporting and Executive Certifications 176
Enterprise Risk Management 182
Tax Accounting 185
Summary 186
Key Terms 187
Review Questions 188
Discussion Questions 188
Notes 189
Chapter 7. Regulatory Bodies,Standard Setters, and Best Practices 191
Introduction 191
Regulations 192
The Sarbanes-Oxley Act of 2002 193
Securities and Exchange Commission 204
Public Company Accounting Oversight Board 208
Federal Sentencing Guidelines for Organizations 211
American Institute of Certified Public Accountants 211
Financial Accounting Standards Board 213
Government Accounting Standards Board 214
International Federation of Accountants 214
Committee of European Securities Regulators 215
State Influence on Corporate Governance 215
Corporate Governance and Courts 216
Corporate Governance and Self-Regulatory Organizations 216
Best Practices 219
Summary 222
Key Terms 223
Review Questions 224
Discussion Questions 224
Notes 224
Chapter 8. Internal Auditors’ Roles and Responsibilities 227
Introduction 227
Internal Auditing Function and Corporate Governance 228
Trend and Relevance of Internal Auditors 231
Authorities and Responsibilities of Internal Auditors 232
Internal Audit Outsourcing 236
Audit Committee Relationship with Internal Auditor 236
Internal Auditors’ Role in Internal Control 238
Institute of Internal Auditors 240
Determinants of Effective Internal Audit 243
Summary 247
Key Terms 248
Review Questions 248
Discussion Questions 249
Notes 250
Chapter 9. External Auditors’ Roles and Responsibilities 252
Introduction 252
External Auditing and Corporate Governance 253
External Auditor Responsibilities 255
Auditor Competency 256
Audit Failures and Audit Quality 257
Public Company Accounting Oversight Board 258
Audit Committee Oversight of External Auditors 267
Auditor Independence 273
Consolidation and Competition in Public Accounting Firms 276
Integrated Audit Approach 277
Audit Strategy 277
Audit of Defined Benefit Pensions 279
Auditor Liability Limitation Agreements 279
Summary 283
Key Terms 284
Review Questions 284
Discussion Questions 285
Notes 286
Chapter 10. Stakeholders’ Roles and Responsibilities 288
Introduction 288
Shareholders 289
Institutional Investors 295
Mutual Funds 298
Hedge Funds 300
Investor Activists 300
Employee Monitoring 300
Summary 303
Key Terms 304
Review Questions 304
Discussion Questions 304
Notes 305
Chapter 11. Roles and Responsibilities of Other Corporate Governance Participants 307
Introduction 307
Legal Counsel 308
Financial Advisors 312
Investment Banks 316
Summary 318
Key Terms 318
Review Questions 319
Discussion Questions 319
Notes 319
Part Three Contemporary Issues in Business Ethics and Corporate Governance 321
Chapter 12. Technology and Corporate Governance 323
Introduction 323
Information Technology 324
Cybercompany Model 325
Extensible Business Reporting Language 327
Continuous Auditing 333
Summary 336
Key Terms 337
Review Questions 337
Discussion Questions 338
Notes 338
Chapter 13. Corporate Governance in Private and Not-for-Profit Organizations 340
Introduction 340
Types of NPOs 341
Purpose and Role of NPOs 342
Public Trust in NPOs 343
Governance of NPOs 345
Governance Structure of NPOs 350
Oversight Function of NPOs 351
Internal Control in NPOs 356
Summary 357
Key Terms 358
Review Questions 358
Discussion Questions 358
Notes 359
Chapter 14. Corporate Governance in Transition 361
Introduction 361
Historical Perspective of Corporate Governance 362
Corporate Governance: A Global Perspective 362
Convergence in Corporate Governance 381
Corporate Governance in Multinational Corporations 390
Summary 391
Key Terms 392
Review Questions 392
Discussion Questions 392
Notes 392
Chapter 15. Emerging Issues in Corporate Governance 395
Introduction 395
Investor Confidence and Global Financial Markets 396
Accountability: The New Business Imperative 403
Social, Environmental, and Ethics Performance 403
Shareholder Challenging Issues 406
Challenges Facing Directors 409
SOX Compliance Challenges 413
Financial Reporting Challenges 414
Emerging Auditing Issues 425
Summary 429
Key Terms 430
Review Questions 430
Discussion Questions 431
Notes 431
Index 435
