Corporate Governance and Ethics

Chapter 15

Emerging Issues in Corporate Governance

INTRODUCTION

INVESTOR CONFIDENCE AND GLOBAL FINANCIAL MARKETS

ACCOUNTABILITY: THE NEW BUSINESS IMPERATIVE

SOCIAL, ENVIRONMENTAL, AND ETHICS PERFORMANCE

SHAREHOLDER CHALLENGING ISSUES

CHALLENGES FACING DIRECTORS

SOX COMPLIANCE CHALLENGES

FINANCIAL REPORTING CHALLENGES

EMERGING AUDITING ISSUES

SUMMARY

KEY TERMS

REVIEW QUESTIONS

DISCUSSION QUESTIONS

NOTES

INTRODUCTION

This chapter presents corporate governance emerging issues, including challenges, opportunities, and improvements. These issues are classified into sections pertaining to (1) global market and investor confidence; (2) the corporate governance structure, including shareholder democracy and director independence; (3) internal controls and risk management, including Section 404 compliance; (4) financial reporting, including convergence in standards and stock option expensing, pension liability recognition, electronic financial reporting, and financial reporting disclosure; and (5) audit function, including an integrated audit approach, liability caps, and auditing for fraud. These emerging issues are classified into governance, financial reporting, audit, and other categories.

Primary Objectives

The primary objectives of this chapter are to

• Understand emerging issues and the challenges, opportunities, and improvement they present to corporate governance.
• Realize the importance of maintaining investor confidence worldwide and illustrate how different countries are trying ...