" (ICA, 29) Here is expressed a philosophical impetus that drives the focus of this research, that such compliance which will generally concern matters such as corporate accounting, the practice of internal oversight and the practice of financial transaction must be considered inextricable from other aspects of practical, procedural and legal operation in terms of its relevance and necessity.
Chapter 3-Practice
The practice of corporate governance may perhaps best be understand from the perspective that deregulation has largely defined the processes and direction of the global economy across the two decades following the Cold War and its inevitable opening of economic channels. This is because in practice, corporate governance is a concept which has suffered much neglect. To the point, the statistics availed by organizations such as the World Bank and the International Monetary Fund illustrate that there are fomenting problems in the current manner in which globalization is executed based on the absence of any real accountability or governance at the international level. This will be important to the discussion which naturally concerns the deregulation that is inherent to the process of globalization. Additionally, the discussion will address the legislation which has been designed to attend to such issues as accounting irregularities and the need for corporations to develop a stronger internal sense of the necessity for sound ethical practice.
The internationalization of our economy has contributed to a change in the nature of corporate governance. Companies to this juncture operating only under the laws of their sovereign nations would suddenly be presented with a veritable cornucopia of legal and economic alternatives to the historical nation/state limitations of corporate enterprising. Governments large and small would find themselves removed from the help of corporate governance by a redistribution of authority. "Many believe that governments are now being pressed by the forces of globalization to transfer policy functions and political authority "upwards" to supranational entities, "downwards" to provincial and local governments, and "sidewards" to private corporate and NGO actors." (Kahler et al., 1) the primary implication here is that the change in the nature of the world economy, wherein nations have become increasingly interdependent through relationships forged by the integration of their private sectors, is contributing to a decentralization of decision-making as it effects the responsible and visionary administration of a multinational organization. The result is that a far greater weight is being displaced upon decision-making at the individual organizational level. Federal governments and international alliances have taken a general approach of deregulation, resulting in a condition where globalizing companies and industries essentially must protect themselves against practices which are either short-sighted, economically unsound or absent of a conscientiousness of humanitarian concerns both at home and abroad.
This is to indicate that while the wave of deregulatory consequences has induced a shared consent for the misappropriation which generally characterizes globalization in its current form, this absence of any genuinely effective body for corporate governance is allowing pacesetting organizations to create a new mold for the effective development of appropriate solutions to the problems discussed in this account.
This is why, in practical application, it must fall upon governments in those nations which have so aggressively pursued, enabled and led the process of global deregulation to turn their attention toward real and pressing domestic needs for oversight. In Chapter 4, a focus on the legislation at the heart of this process shows how the U.K. And the U.S. have approached the policy aspects of the issue.
Chapter 4-the Application of Theory to Practice:
The focus on accounting in both the U.K. And the U.S. is demonstrative of the core issues and incidences which have produced the need. This is notable as a direct response to the specific nature of such cases as Enron. Indeed, just as Enron had been a symbol for the perceived economic prosperity of the 90's, so too would it become emblematic of the malfeasant underbelly of America's increasingly unregulated and poorly self-governed corporations. In 2002, allegations came to the surface that the organization's core of executive leaders had misrepresented company earnings, participated in insider-trading and had essentially looted the company of its value.
Through its accounting firm, the likewise large-scaled Arthur Andersen, "Enron lied about its profits and stands accused of a range of shady dealings, including concealing debts." (BBC News, 1) the company's top executives had misled investors and shareholders with regard to actual performance indicators and stock values, creating a false investment atmosphere which persisted for years...
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Both proposals were consequently amended and eventually accepted by the SEC. The audit committee makes sure that the books aren't being cooked and that shareholders are properly informed of the financial status of the firm. Characteristically, the audit committee advocates the CPA firm that will audit the company's books, appraises the activities of the company's independent accountants and internal auditors, and reviews the company's internal control systems and its accounting
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