RUNNINGHEAD: Final Exam
University of Phoenix
May 23, 2010
With a multitude of conflicting expectations, modern companies can be complex regarding the environmental, societal, and long-term impacts of the business. Because too often individual shareholders will not ask the difficult questions on how corporations are effecting the environment, society and the economy, it is as a result the accountability of the institutional shareholders to take this challenge to big companies on behalf of the individuals that they represent.
Different committees have to be established and put into process in order for a company to represent good corporate governance. The Audit Committee is significant in regards to corporate governance because it assist the board of directors in achieving the fiduciary and financial responsibilities to shareholders as well as assuring corporate governance accountability.
Audit committees are mainly accountable for the quality connected to such matters as: • Regulatory and legal matters
• Financial reporting process
• Internal auditing process
• External auditing process
• Internal controls
• Conflicts of interest (code of corporate conduct, fraud presentation) (enotes.com) • Other matters (interim reporting, information technology, officers' expense accounts)
The Audit Committee has to be made up of independent outside directors and a financial expert. Since the company is publically traded, it has to be listed on the U.S. Stock Exchange. The importance of the Ethics Committee is to review, oversee and monitor compliance of a company directors, employees and officers. The Compensation Committee is responsible for the corporation’s overall compensation. The Committee must have at least three members at all times. It is also the responsibility of the committee to produce an annual report on the...