In this era, organisations are trying to to go ahead to their competitors and this is only possible when the company adopt well specified accounting techniques. An untrained person in the firm are not able to use such accounting techniques so that the firm can lead to their competitors (Cernusca and Balaciu, 2015). A professional qualified accountant is required to handle all such tools and techniques for the betterment of organisational performance. In any organisation, company needs to appoint such qualified accountants for the consistent overview of the entire finance related issues and tries to manage such issues. As, accountant in any organisations are the watchmen of corporate governance and finance related issues.
For the first time, corporate governance code was adopted in cadbury report in 1992 and in this report, it has been mentioned that CG is the methodology by which organisation are directed and controlled. In a simple way, senior managers or the leaders in the company have to make framework for effective and efficient practices. In many company, such senior mangers are the chief persons who formulate the best strategy in the company in order to attain the long term objectives in the company. Corporate governance simply means to regulate the rules, regulation and comply the laws which are applicable to the company (Koonce, 2015). The professional accountants are the main persons who manages the company to large extent. As money is the primary thing which will have to overlook for the all activities of the business. So the professional accountant manages all departments of the organisation for effective outflow or inflow of funds and they also have to check whether the funds are used by any division is appropriate or not for effective implementation and such PA also have to analyse that the fund allotted is utilized in most effective way. Corporate governance is an important thing in any organisation as the limited firms are mainly responsible to its shareholders. But they also have to take care of other stakeholders. Mainly the companies which are listed on recognised stock exchanges are the centre of complying corporate governance code this is because such types of company are having lot of shareholders and stakeholders as well whose investment is basically depends on the company's top level authorities and their investment are being compromised or improved (The rise of the professional accountant in British management, 2017). Although the shareholders having substantially the large stake in the company they are the persons who are able to take part in the company's investment decision process (Triyuwono, 2015).
In UK corporate governance code was adopted after the fall of maxwell communication plc and pollypeck international plc and after a few years later, in US Sarbanes oxley Act was implemented this is due to the collapse of enron and worldcom corporations. Then the government feel that to remove all such difficulties there is a strong requirement of corporate governance for the better transparency in the organisation. Before implementation of corporate governance, it had found that most senior managers and the professional accountant and the other main player did wrong thing on their part and due to such effect, small shareholders investments got down. As there were no strong Act to punish all such people. Many of the countries uses a principle based policy to CG. It covers constructing an entire set of best practices to which company should follow (Brusca and et. Al 2016). If the organisation does not comply any of the principles of the company then professional accountants will disclose such non compliance in the their audit reports and also make impression on such audit report that why it was not followed. With the help of such audit report company's shareholders and other interested persons would get to know about such incidence. In general, in a small organisation, corporate governance framework is not compulsorily required. But it comes to strictly followed when company would enlarge their operation and listed on the exchange. Then the company will have to strictly followed all the exchange compliances. Non complying will lead to face severe penalties and prosecution. As the chief financial officer have the key important position in any company, holding the financial issues of the company and also confirms that all the financial resources are being used in the organisation in effective way so that the company's objectives are attained. CFO's also highlights the fundamental value of the role.
While completing their task they have to confirm that local authorities have been allowed for efficient financial suggestion at the peak level. CFO duties charged with and leading and guiding financial strategies and operations. CFO in any organisation not only followed professional slandered but also other Acts which are applicable to organisation. Being the finance head, CFO need to lead and guide finance functions in the organisation and make the company viable by way of strategy. This is possible when CEO would be professional qualified. This means that the professional accountants are the persons who have done their courses from any certified independent body. In UK, Association of Chartered Certified Accountants(ACCA) is a independent accounting body which produces qualified professional accountants. Who further take the company on the top by way of inventing strategies and advance practical application. These are the person who are most qualified in the field of accounting and auditing and able to manage all the applicable corporate governance. Code (Salvioni,2015).
They are the non active participant in an organisation. They are also helpful in decision making as the active directors of a firm. They have same legal responsibilities like active participants. They are helpful as in recovering out their company from all the risk and helps them to manage their situation which are not even in their favour. They are also work as the leader of an organisation so, that they can show right path.
They also helps in setting strategies for organisation. And helps in ensuring that their financial and human resources are at their place or not. They monitor these activities so that they can meet their objectives as early as possible in an effective manner. And take a review of their management performance(Carey, 2015). They also establish the companies policies and rules according to standard. Ensuring that their members obligations will be met properly and understood all the policies.
Strategy: They are helpful in maintaining strategy on correct proposals which are mainly helpful for organisation. They have a right to challenge any kind of acceptance on proposal taken by active directors. So, that their presence will be always be effective for conserving organisation as a whole.
Performance: They are helpful in scrutinising management performance for completing management goals and targets. And their objectives also. They are helpful in monitoring management performance.
So, a charted accountant can work as a non executive director for this they have to learn all of their rights and responsibilities towards organisation. They are helpful in contributing to the board by giving effective ideas for an organisation. In which they can also helpful in making strategy, risk management and reporting. To be more effective they have to be more competent and be ethical for all the activities (Cernusca, 2015).
Non executive director which are working as charted accountant have to follow ICAEW code of ethic in which they have to maintain confidentiality towards an organisation. Not only this they have to be professional and objective for any time to their firm. The high standard professionalism plays vital role in maintaining accountancy profession and also leads to ensuring trust in reporting and practises of an organisation.
They role is wide ranging and challenging. They have to maintain their focus on board not on daily basis activities of a business. So, that they can provide independent and objective decisions for their business for better growth. With the help of their decision and suggestions a business can survive for long period by solving issues. They also have some special knowledge and experience so that they can suggest effective ways to their company. As by giving wise suggestion they maintain a high standard in the eyes of active board directors as they have some personal qualities for working (Brouard and et. al.2016).
He can be more effective as non executive director by auditing financial report for their organisation. So, if they have any kind of circumstances related to this concern he can help them out from that. Also, they have proper knowledge about all the accounting standard so, it is quiet beneficial to accept apply those in business. By auditing financial reports they are more im0portant for taking all the decisions towards their shareholders. Also, they can help them in introducing their firm in public sector. So, as that they can earn higher profit. In financial reports they can easily maintain and saves the cost of hiring accountant for their firm. Also, they have proper knowledge about all the laws. So, it helps them to do ethical activities not unethical. Also, they can maintain balance between laws and unlawful activities. So, firm cannot be get sue by anyone.
They can provide necessary suggestion for the remuneration for their employees and div8idend to their shareholders. For this they can maintain a proper amount for reserve. They can helpful in controlling cost related factors by giving nice suggestion. So, that they can provide best quality. The can helpful in solving all the tax related disputes of their firm. The firm is going to save their tax amount for their firm. Also, they can helpful in sorting out any time of raid by tax department. They can be helpful in generating reserve. By generating more and more reserve, any firm can survive at the time of depression. Reserve are also helpful for them by increasing their property. Their fixed assets are going to increase day by day so that they can produce more quantity and give best quality service to their customers.
They can helpful in fulfil all the tax compliances on time. So, they can not be bear any kind of tax penalty. They can also helpful in sustainable management by their fir. So that professional accountants can make correct decisions while they are having a post of non-executive directors (Joshi and et. Al 2016). They can manage all the process for penalty made by any misinterpretation. So, company can maintain a minimum balance all the time. They can ensures that their shareholders relation with board of directors. If not, they are helpful in making a bond between them. So, company is not going to face any kind of problem in near future. The role of non executive director as charted accountant is to ensures that their annual reports are fair or not. Authenticity of report are very necessary for all their stakeholders. Stakeholders are the backbone of any firm. It can establish a better relation between them. So, all the conditions can be fulfilled with a specific time duration.
They have to maintain a confidentiality of their company. They have to maintain proper security for that. If, reports or personal information is going to leak by any source then it totally affects their goodwill. So, they have to maintain proper security in this concern. They can also helpful in establishing all general guidelines, policies and rules. So, that they can be always aware for that. And not be getting involve in any kind of illegal activity. A non executive director plays a important role for distributing all the remuneration of all their employees are doing properly or not. Not only to their employees but also their board of directors or managers.(The rise of the professional accountant in British management.2017).
Need Accounting assignment help in Australia from professional experts to score higher grades. Contact us to get the best assignment writers for your assignments.
From the above mentioned facts and figure, it has been found that there is a strong need to follow corporate governance code in every organisation for the transparency in the operations and for implementation, it is important for the requirement of qualified professional accountants who can look after the company's entire rules and regulations and to offering better transparency in the company. A professional accountant in the designation of non executive director can detect the non compliances of the corporate governance code and helps auditors to express such incidence ion the audit report so that shareholders and the other interested person would aware of the company.
- Brouard, F and et. al., 2016. Professional Accountants’ Identity Formation: An Integrative Framework. Journal of Business Ethics.
- Brusca, I and et. al., 2016. Public sector accounting and auditing in Europe: The challenge of harmonization. Springer.
- Carey, P.J., 2015. External accountants’ business advice and SME performance. Pacific Accounting Review. 27(2). pp.166-188.
- Cernusca, L. and Balaciu, D.E., 2015. The Perception of the Accounting Students on the Image of the Accountant and the Accounting Profession. Journal of Economics and Business Research. 21(1). pp.7-24.
- Joshi, M and et. al., 2016. IFRS adoption in ASEAN countries: Perceptions of professional accountants from Singapore, Malaysia and Indonesia. International Journal of Managerial Finance, 12(2), pp.211-240.
- Koonce, L and et. al., 2015. The effects of norms on investor reactions to derivative use. Contemporary Accounting Research.
You may also like to read: Managing Financial Resources and Decisions