Top Banner
CORPORATE GOVERNANCE, ETHICS & SOCIAL RESPONSIBILITY 06/13/22 by: JAYNARD S. SOLANTE
32

CORPORATE GOVERNANCE, ETHICS & SOCIAL RESPONSIBILITY

Jan 15, 2016

Download

Documents

DYAN

CORPORATE GOVERNANCE, ETHICS & SOCIAL RESPONSIBILITY. AUDIT, CONTROLS AND COMPLIANCE. Distinction Between Auditing and Accounting Accounting Recording, classifying, and summarizing information for decision making by management and other users Auditing - PowerPoint PPT Presentation
Welcome message from author
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
Page 1: CORPORATE GOVERNANCE, ETHICS & SOCIAL RESPONSIBILITY

CORPORATE GOVERNANCE,

ETHICS & SOCIAL

RESPONSIBILITY

04/21/23 by: JAYNARD S. SOLANTE

Page 2: CORPORATE GOVERNANCE, ETHICS & SOCIAL RESPONSIBILITY

04/21/23 by: JAYNARD S. SOLANTE

AUDIT, CONTROLS

AND COMPLIANCE

Page 3: CORPORATE GOVERNANCE, ETHICS & SOCIAL RESPONSIBILITY

04/21/23 by: JAYNARD S. SOLANTE

Distinction Between Auditing and Accounting

Accounting Recording, classifying, and summarizing information for decision making by management and other users

Auditing•Concerned with verifying whether recorded transactions properly reflect the economic events the occurred during the accounting period

•Since accounting information is properly recorded, auditor must thoroughly understand these rules

•Accumulates and interprets audit evidence

Page 4: CORPORATE GOVERNANCE, ETHICS & SOCIAL RESPONSIBILITY

04/21/23 by: JAYNARD S. SOLANTE

Distinction Between Internal and External Auditing

Internal Auditing An organization control feature, which measure and evaluates the effectiveness of other organized controls. Internal auditors conduct operational audits and are compensated by their employer organizations.

External AuditingIn contrast independent auditing done by CPA’s is a society control external, financial information users. External auditors and audit fees are paid by the organization audited.

Page 5: CORPORATE GOVERNANCE, ETHICS & SOCIAL RESPONSIBILITY

04/21/23 by: JAYNARD S. SOLANTE

Auditing

External Auditing:

- the examination of financial statements by the independent auditor for the purpose of expressing opinion on the fairness with which they present financial position, results of operations, and changes in financial position in conformity with generally accepted accounting principles.

Page 6: CORPORATE GOVERNANCE, ETHICS & SOCIAL RESPONSIBILITY

04/21/23 by: JAYNARD S. SOLANTE

Auditing

Internal Auditing:

- an independent appraisal activity within an organization for the review of the operations as a service to management.

Page 7: CORPORATE GOVERNANCE, ETHICS & SOCIAL RESPONSIBILITY

F TUENTE RIANGLER E A L T Y D E V E L O P M E N T

CORPORATE AUDIT

DEPARTMENT

04/21/23 CORPORATE AUDIT DEPARTMENT 7

Page 8: CORPORATE GOVERNANCE, ETHICS & SOCIAL RESPONSIBILITY

AUDIT DIRECTOR

HOTELS & FTRDC

TEAMLEADER

FINANCIAL AUDIT TEAMLEADER

SPECIAL SERVICES TEAM

SYSTEMS AUDIT TEAM

MANILA AUDIT TEAMLEADER

MOTELS , FSL, VITAL-C, MSBC TEAMLEADER

REVENUE AUDIT STAFF INTERNAL AUDIT STAFF

04/21/23 CORPORATE AUDIT DEPARTMENT 8

REVENUE AUDIT MANAGER

INTERNAL AUDIT MANAGER

ORGANIZATIONAL STRUCTURE

IT AUDIT TEAM

Page 9: CORPORATE GOVERNANCE, ETHICS & SOCIAL RESPONSIBILITY

04/21/23 CORPORATE AUDIT DEPARTMENT 9

BS - ACCOUNTANCY

BSC-MANAGEMENT ACCOUNTING

BS – COMPUTER ENGINEERING

BS - INFORMATION TECHNOLOGY BS – COMPUTER SCIENCE

BS – TOURISM / HRM

BS – INDUSTRIAL ENGINEERING

Page 10: CORPORATE GOVERNANCE, ETHICS & SOCIAL RESPONSIBILITY

General Responsibilities:

• Revenue Audit Section:Responsible in ensuring that the revenue of the SBU is accounted for.

• Internal Audit Section:Performs Internal Audit functions of the Company in accordance with the instructions and Audit Program Guides provided by the Corporate Audit Officers that would cover Operations, Financial, Compliance, Systems, IT and Risk-based audits.

04/21/23 CORPORATE AUDIT DEPARTMENT 10

Page 11: CORPORATE GOVERNANCE, ETHICS & SOCIAL RESPONSIBILITY

04/21/23 by: JAYNARD S. SOLANTE

Page 12: CORPORATE GOVERNANCE, ETHICS & SOCIAL RESPONSIBILITY

04/21/23 by: JAYNARD S. SOLANTE

STEPS IN CONDUCTING AUDIT

Page 13: CORPORATE GOVERNANCE, ETHICS & SOCIAL RESPONSIBILITY

04/21/23 by: JAYNARD S. SOLANTE

OPERATIONS AUDITING

Is a systematic process of evaluating an organization’s effectiveness, efficiency and economy of operation under management’s control and reporting to appropriate persons the results of the evaluation along with recommendations for improvements.

Page 14: CORPORATE GOVERNANCE, ETHICS & SOCIAL RESPONSIBILITY

04/21/23 by: JAYNARD S. SOLANTE

OPERATIONAL AUDIT

The general objective of the operational audit is “to assist all members of management in the effective analysis, appraisals, recommendations and pertinent comments concerning the activities reviewed” in such matters as: 1. The adequacy of the control structure for which the operating department is responsible. 2. Departmental control over its operations in relation to company policies, other departments, requirements of departmental management, and financial and accounting matters.

Page 15: CORPORATE GOVERNANCE, ETHICS & SOCIAL RESPONSIBILITY

04/21/23 by: JAYNARD S. SOLANTE

OPERATIONAL AUDIT

The underlying concept is that wherever we audit, and whether we use financial or operating records as basis, we audit from a management or businessman’s standpoint – the effect of activities on the company’s position – and not simply as verifiers of account, accuracy & propriety.

Objectivity is “representing things as they are, unbiased by opinions or habits of thought”.

The audit of any department or function comprised four basic steps such as familiarization, verification, evaluation and reporting recommendations

Page 16: CORPORATE GOVERNANCE, ETHICS & SOCIAL RESPONSIBILITY

A customer arrives

Front Desk

Playing Badminton?

Yes

No

Hosted by member?

Yes

No

Pay for Day Card only.

Gallery Restaurant

Service Desk

Purchase service, claim

consumable, submit Day

Card

Receive Service Pass

Enjoy service

Pay addl bill & get Exit

Pass at end of service

Present Exit Pass

Exit (End)

Member?

Yes

No

Swipe card

Pay Visiting Player Card

Pay Guest Player Card

Submit VPC

Submit GPC

Playing Badminton?

No

Show ID card

Yes

submit ID card

Service Desk

Get E-pass & Badminton

Service Pass

Locker room

Laundry Station

Submit SP, claim towel

Dress up

E-pass slot

Put E-pass in slot

Service Desk

Play Badminton

Finish Badminton

Remove E-pass fr slot

Return E-pass, pay charges

Return towel

Get exit pass,

show to

Register

Service Desk

Member?

Yes

No

Front Desk

Swipe card

Exit (End)

System Flow Chart

Page 17: CORPORATE GOVERNANCE, ETHICS & SOCIAL RESPONSIBILITY

04/21/23 by: JAYNARD S. SOLANTE

PETER’S MATRIX

FINDING/S ROOT CAUSE/S RISK/S RECOMMENDATION/S ACTION TAKEN

Page 18: CORPORATE GOVERNANCE, ETHICS & SOCIAL RESPONSIBILITY

04/21/23 by: JAYNARD S. SOLANTE

OPERATIONAL AUDIT

In general, internal operational audits are conducted for any one on more of six different purpose.

. Appraisal

. Compliance

. Protection of assets

. Verification

. Appraisal of performance

. Recommendation

Page 19: CORPORATE GOVERNANCE, ETHICS & SOCIAL RESPONSIBILITY

04/21/23 by: JAYNARD S. SOLANTE

OPERATIONAL AUDIT

In general, internal operational audits are conducted for any one on more of six different purpose.

. Appraisal

The internal auditor should determine whether controls are sound & adequate in light of organization for which they are designed.

Page 20: CORPORATE GOVERNANCE, ETHICS & SOCIAL RESPONSIBILITY

04/21/23 by: JAYNARD S. SOLANTE

OPERATIONAL AUDIT

In general, internal operational audits are conducted for any one on more of six different purpose.

. Appraisal

. ComplianceInstituting controls is meaningless unless controls are complied with. Purpose of compliance audit is to determine whether specific control policies, programs, or procedure are operating satisfactorily. Focus not so much on effects of non compliance, but preventing future non-compliance.

Page 21: CORPORATE GOVERNANCE, ETHICS & SOCIAL RESPONSIBILITY

04/21/23 by: JAYNARD S. SOLANTE

OPERATIONAL AUDIT

In general, internal operational audits are conducted for any one on more of six different purpose.

. Appraisal

. Compliance

. Protection of assets

Purpose of reviews is to determine whether assets are properly accounted for and safeguarded from losses.

Page 22: CORPORATE GOVERNANCE, ETHICS & SOCIAL RESPONSIBILITY

04/21/23 by: JAYNARD S. SOLANTE

OPERATIONAL AUDIT

In general, internal operational audits are conducted for any one on more of six different purpose.

. Appraisal

. Compliance

. Protection of assets

. Verification

Operational audits are designed to verify accuracy are reliability of internal management reports.

Focus is not necessarily to respond to result of inaccurate or unreliable data, but on the critical issue of promoting accuracy and reliability.

Page 23: CORPORATE GOVERNANCE, ETHICS & SOCIAL RESPONSIBILITY

04/21/23 by: JAYNARD S. SOLANTE

OPERATIONAL AUDIT

In general, internal operational audits are conducted for any one on more of six different purpose.

. Appraisal

. Compliance

. Protection of assets

. Verification

. Appraisal of performance As a major operational control over organization effectiveness, internal auditors are frequently called upon to appraise employee performance.

Employee-performance reviews can represent the one operational audit activity least consistent with the boundaries of an internal auditor’s professional expertise.

Page 24: CORPORATE GOVERNANCE, ETHICS & SOCIAL RESPONSIBILITY

04/21/23 by: JAYNARD S. SOLANTE

OPERATIONAL AUDIT

In general, internal operational audits are conducted for any one on more of six different purpose.

. Appraisal

. Compliance

. Protection of assets

. Verification

. Appraisal of performance

. Recommendation

Although not an audit activity, recommending operating improvements is the most significant by-product of the internal auditor’s professional role.

Page 25: CORPORATE GOVERNANCE, ETHICS & SOCIAL RESPONSIBILITY

04/21/23 by: JAYNARD S. SOLANTE

FRAUD AUDIT

Integrity Risk: 

• Management Fraud- fraud committed for the benefit of the company

• Employee Fraud-fraud committed for the benefit of another person / employee and to the detriment of the company.

• Illegal Acts• Unauthorized use• Reputation

Page 26: CORPORATE GOVERNANCE, ETHICS & SOCIAL RESPONSIBILITY

04/21/23 by: JAYNARD S. SOLANTE

THE FRAUD TRIANGLE Why good people do wrong? 

Pressure (Real or perceived) 

    

  Opportunities, Consequences Rationalizationand Likelihood of Detection(Real or Perceived)

Page 27: CORPORATE GOVERNANCE, ETHICS & SOCIAL RESPONSIBILITY

04/21/23 by: JAYNARD S. SOLANTE

MOTIVES OF FRAUD 

Personal Cure financial problems

Enhance lifestyle

Revenge against company

Conceal illegal acts

Cure perceived injustice

Ego—“beat the system”

Personal ambition

Meet incentive awards 

Page 28: CORPORATE GOVERNANCE, ETHICS & SOCIAL RESPONSIBILITY

04/21/23 by: JAYNARD S. SOLANTE

MOTIVES OF FRAUD 

Corporate Reach or exceed quotas or goals

Increase popularity and reputation

Maintain ability to borrow

Manipulate stock price / value

Meet regulatory requirements 

Page 29: CORPORATE GOVERNANCE, ETHICS & SOCIAL RESPONSIBILITY

04/21/23 by: JAYNARD S. SOLANTE

FRAUD DETECTION & DETERRENCE 

Page 30: CORPORATE GOVERNANCE, ETHICS & SOCIAL RESPONSIBILITY

04/21/23 by: JAYNARD S. SOLANTE

FRAUD DETECTION & DETERRENCE 

The Three Principal Lines of Defense: First Line – Code of conduct and business ethics policies and procedures

Based on an assessment of the possible risks facing the company, an understandable written employee code of conduct and business ethics document should be in place.

Second Line – Internal control and Management control structure

An effective internal control and management organization structure provides both prevention and detection elements, but not significant deterrence!

Third Line – Internal Audit activitiesBased on risk assessment of fraud and illegal acts, internal audit evaluates the 1st and 2nd line of defense mitigators.

 

Page 31: CORPORATE GOVERNANCE, ETHICS & SOCIAL RESPONSIBILITY

04/21/23 by: JAYNARD S. SOLANTE

Internal Audit is responsible for: Ensuring the existence of control w/ systems designed to prevent or deter the forms of fraud. Identifying areas of risks where theft or manipulation may be likely to occur. Ensuring adequacy and effectiveness of controls in financial accounting and other areas subject to theft, fraud or embezzlement. Exercising the care and skill of a reasonably prudent and competent professional.

Page 32: CORPORATE GOVERNANCE, ETHICS & SOCIAL RESPONSIBILITY

04/21/23 by: JAYNARD S. SOLANTE

The distinction between an Honest Mistake and Fraud is the underlying INTENTION behind the

ACTION.