Corporate Governance General Questions Accounting Essay

This subdivision deals with the informations collected from the field of survey. As already stated, those informations were extracted from the returned questionnaire collected from 26 of 40 quoted fiscal establishments.

To show the findings and analyze them so as to make a decision on the research subject hypothesis which will be formulated for the analysis.

The questionnaire as mentioned in chapter 3 were broken down into different subdivisions and the analysis performed consequently utilizing the SPSS 16.0 package.

Table 1 Questionnaire administration/distribution: To cite companies.

Entire figure of administered questionnaire

40

Entire returned

26

Response rate ( % )

65 %

Beginning: Questionnaire

From table 1 it can be seen that 40 questionnaires were issued and of these 26 were returned. This represents 65 % of the entire figure administered. The low response rate may be declarative of the non-interest or an unwillingness to unwrap confidential affairs.

4.1 Section A Corporate Governance General Questions

Q1. “ Corporate Administration is a system by which corporations are directed and controlled. ” Sir Adrian Cadbury ( 1999 )

Frequency

Percentage

Valid Percentage

Accumulative Percentage

Valid

strongly hold

4

15.4

15.4

15.4

agree

14

53.8

53.8

69.2

impersonal

8

30.8

30.8

100.0

Entire

26

100.0

100.0

Table 1: CG general Q1

Upon being asked about the definition of CG, some of the respondents, i.e. 69.2 % consent to the statement, 30.8 % remained open as seen in Table 1 and seconded by the pie chart 1. Analysis suggests that CG is no longer alien to the Mauritius Financial sector deducing that all respondents are familiar with the term, CG.

Chart 1: CG general Q1

Q2.Your establishment is witting about the demands contained therein the Code of Corporate Governance of Mauritius.

Frequency

Percentage

Valid Percentage

Accumulative Percentage

Valid

strongly hold

4

15.4

15.4

15.4

agree

15

57.7

57.7

73.1

impersonal

6

23.1

23.1

96.2

disagree

1

3.8

3.8

100.0

Entire

26

100.0

100.0

Table 2 CG general Q2

From table 2, some mix responses to the statement were obtained. While the bulk of respondents are cognizant of the construct of CG, 23.1 % were diffident and 3.8 % disagreed. This is besides represented by a histogram. The consequence from the above analysis goes to corroborate that the Mauritius Financial establishments, on the whole, no longer necessitate consciousness on CG since the debut of the Code of CG. The relevant inquiry to be asked is whether this is clearly reflected in their one-year study and efficaciously put into pattern.

Chart 2: CG general Q2

The histogram shows the graphical representation of the responses including the low criterion divergence value of 0.732 which enhances the reading that the information points tends to be near to the average value of 2.15, thereby taking to the verification of good consciousness of CG demands.

Q3. The Code is efficaciously abided by your company since its execution.

Frequency

Percentage

Valid Percentage

Accumulative Percentage

Valid

Strongly Agree

2

7.7

7.7

7.7

Agree

12

46.2

46.2

53.8

Impersonal

10

38.5

38.5

92.3

Disagree

2

7.7

7.7

100.0

Entire

26

100.0

100.0

Table 3 CG general Q3

Table 3 indicates that 7.7 % who strongly agree and 46.2 % who concur that since the publication of the Code, it is efficaciously abided while a little proportion, 38.5 % declined to react and 7.7 % opposed the statement. The one-year study revelations appear to bespeak a positive move towards following the CG codification but at that place seems little grounds of high or complete conformity with the surveyed points among the bulk of listed companies. This is every bit interpreted in the saloon chart in Chart 3.

Chart 3: CG general Q3

Hypothesis 1: ‘Your Company is to the full cognizant of the demand of the Code ‘ & As ; ‘The codification is efficaciously abided by your company since its 11111111111111implementation ‘ .

The respondents were expected to supply the same answer to Question 2 and 3, as cognition of the Code and its subsequent execution are straight correlated. To verify this hypothesis, the Pearson Correlation statistical trial has been used.

H0: There is no correlativity between ”Your Company is to the full cognizant of the demand of the Code ‘ & A ; ‘ The codification is efficaciously abided by your company since its execution ‘ .

H1: ”Your Company is to the full cognizant of the demand of the Code ‘ & As ; ‘The codification is efficaciously abided by your company since its execution ‘ are correlated.

Correlations

Your establishment is witting about the demands contained therein the Code of Corporate Governance of Mauritius.

The Code is efficaciously abided by your company since its execution

Your establishment is witting about the demands contained therein the Code of Corporate Governance of Mauritius.

Pearson Correlation

1

.677*

Sig. ( 2-tailed )

.011

Nitrogen

13

13

The Code is efficaciously abided by your company since its execution

Pearson Correlation

.677*

1

Sig. ( 2-tailed )

.011

Nitrogen

13

13

* . Correlation is important at the 0.05 degree ( 2-tailed ) .

Table 4: Correlation between variable Q2 and Q3

The Pearson Correlation in Table 4 shows a p-value & lt ; 0.05 ( 2- tailed trial at 95 % significance degree ) which implies that there is a important correlativity between the 2 variables. Therefore H0 is rejected in favor of H1, showing and corroborating a relationship between Question 2 and Question 3.

4.2 Section B Board of Directors and Committees

Q1. The functions and duties of the Board, Senior Management, Non Executives and Independent Directors good defined in your company?

Frequency

Percentage

Valid Percentage

Accumulative Percentage

Valid

strongly hold

2

7.7

7.7

7.7

agree

7

26.9

26.9

34.6

impersonal

13

50.0

50.0

84.6

disagree

4

15.4

15.4

100.0

Entire

26

100.0

100.0

Table 5 Board of Directors and Committees Q1

Chart 4 Board of Directors and Committees Q1

Table 5 and Chart 4 shows that there was a strong involuntariness from the respondents to unwrap an reply to the statement. A monolithic 50 % responded to ‘Neutral ‘ , 15.38 % disagreed, while 26.92 % and 7.69 % agreed and strongly agreed.

Statisticss

Nitrogen

Valid

26

Missing

0

Mean

2.73

Std. Deviation

.827

Table 6 Board of Directors and Committees Q1

The Standard divergence ( 0.827 ) shows a fluctuation about the mean ( 2.73 ) and this may be attributed due to an involuntariness of revelation of confidential information or trouble in specifying non executive and independent managers in footings of their functions and aims in the companies. It is difficult to judge from Table 6 any kind of conformity with Section 2.5.4 of the CG codification.

Q2. As defined by the Code of CG in Mauritius, all companies should hold at least two independent managers. Your company abides by this statement.

Frequency

Percentage

Valid Percentage

Accumulative Percentage

Valid

Strongly Agree

20

76.9

76.9

76.9

impersonal

4

15.4

15.4

92.3

disagree

2

7.7

7.7

100.0

Entire

26

100.0

100.0

Table 7 Board of Directors and Committees Q2

Chart 5 Board of Directors and Committees Q2

Table 7 and Chart 5 show that the bulk of respondents, 76.9 % comply with Subsection 2.2.2 of the Code of Corporate Governance while 15.4 % refused to react and 7.7 % opposed the statement. This is supported every bit good in the ARs where 76.9 % abide by the Code, holding more than 2 independent managers runing in their Companies. One of the companies provided sound justification for non holding independent managers. The chief ground is that the Board is wholly satisfied that the executives and the non-executives managers are independent both in character and judgement.

Q.3 How many Directors are soon functioning on your board?

Question 3 of Section B was designed in a cloaked signifier of inquiry 6 so as to corroborate dependability of the capable affair. It can be seen that merely 23.1 % do non stay by the Code and therefore it is rather dependable.

Statisticss

Q4. The constitution of an audit and Corporate Governance commission contributes in bettering Corporate Governance.

Nitrogen

Valid

26

Missing

0

Mean

1.85

Std. Deviation

.368

Table 8 Board of Directors and Committees Q5

Q4. The constitution of an audit and Corporate Governance commission contributes in bettering Corporate Governance.

Frequency

Percentage

Valid Percentage

Accumulative Percentage

Valid

strongly hold

4

15.4

15.4

15.4

agree

22

84.6

84.6

100.0

Entire

26

100.0

100.0

Table 9 Board of Directors and Committees Q4

In regard to the foundation of commissions, companies are required to hold at least an audit commission and a CG commission. All companies do run into this demand as per Table 8 with average 1.85 connoting a high rate of concurrency. This is validated every bit good in the ARs where 100 % consent to holding both an audit and CG commission.

Q.5 Meetings between such commissions and the Board are disclosed in your one-year study.

Frequency

Percentage

Valid Percentage

Accumulative Percentage

Valid

strongly hold

13

100.0

100.0

100.0

Table 10 Board of Directors and Committees Q5

The figure of times in a twelvemonth committees met must be disclosed in the AR ( Section 8.4 Board Meetings ) as stated in the Code and it was widely expected that those companies holding commissions should stay by the rule. There is modest reference of commission ‘s meeting and the Board in the surveyed company ‘s AR ( 100 % as per Appendix? ? ? ) , Table 10 shows grounds of conformity.

Hypothesis 2: ‘The constitution of an audit and a CG commission plays an of import function in bettering corporate administration ‘ & amp ; ‘Meetings between such commission and the Board are disclosed in the AR ‘

It was expected that respondents holding an audit and CG commission were supposed to hold regular meetings as the fortunes aroused as per the CG codification and reflected in their AR.

H0: There is no correlativity between ‘ The constitution of an audit and a CG commission plays an of import function in bettering corporate administration ‘ & amp ; ‘Meetings between such commission and the Board are disclosed in the AR ‘

H1: The constitution of an audit and a CG commission plays an of import function in bettering corporate administration ‘ & amp ; ‘Meetings between such commission and the Board are disclosed in the AR ‘ are correlated.

General Analysis of Section B- corriz partou akoz correlativity? ? ? ? ? ? /

4.3 Section C Secretarial Function and Monitoring

Q1.The ideal corporate secretary ( CS ) should hold a background as a fiscal professional, an lawyer or a attorney. Your company deems these properties as of import when naming a CS.

Frequency

Percentage

Valid Percentage

Accumulative Percentage

Valid

strongly hold

14

53.8

53.8

53.8

agree

6

23.1

23.1

76.9

impersonal

4

15.4

15.4

92.3

disagree

2

7.7

7.7

100.0

Entire

26

100.0

100.0

Table 11 Secretarial Function and Monitoring Q1

Consequences obtained from table 11 with 76.9 % who agreed to the statement, may bespeak that the company ‘s CS appointed is based as per his/her properties, experience and making while 15.4 % remained impersonal.

While most AR surveyed ( 91.75 % ) provided written inside informations of their old experience and making, The Metropolitan Corporate Counsel, ( April 2005 ) , argued that irrespective of his/her professional background, the CS is traveling to hold to work closely with the Board, have a committedness to the highest ethical and professional criterion in relation to the company ‘s aspiration

Chart 6 Secretarial Function and Monitoring Q1

The CS needs to keep the critical communicating nexus between the board and the company so as to heighten and remain up to day of the month with corporate alterations. Chart 6 with 23.08 % agreeing and 76.9 % strongly staying, there is indicant that the CS is extremely accountable to the board as a whole. While the basic responsibilities of the CS has been outline in some ARs, their overall duties, and the tantrum of their function within senior direction such as good working cognition of the corporate, legal and regulative affairs which may come up at a meeting are necessary properties a CS should possess.

4.4 Section D Risk direction, Internal Control and Internal Audit

Chart 7 Risk direction, Internal Control and Internal Audit Q1

From Chart 8, 69.2 % and 15.4 % acknowledge the duty of the Board sing Internal Control. Disclosure in ARs besides demonstrates that all establishments have a statement admiting the manager ‘s duties for Internal Control, fulfilment of Subsection 5.4 of the Code.

Q2.Internal audit are given the duty to presume the map of hazard direction.

Frequency

Percentage

Valid Percentage

Accumulative Percentage

Valid

strongly hold

14

53.8

53.8

53.8

agree

8

30.8

30.8

84.6

impersonal

2

7.7

7.7

92.3

strongly differ

2

7.7

7.7

100.0

Entire

26

100.0

100.0

Table 12 Risk direction, Internal Control and Internal Audit Q2

The primary end of an internal audit is to measure a company ‘s hazard direction and non to presume the full duty of hazard direction which forms portion of the responsibility of the board. The bulk 53.8 % and 30.8 % , who strongly agreed and agreed severally, abide to the fact that they are accountable to the Internal Audit for the designing, implementing and monitoring of hazard direction as per a statement in their AR ( 84.6 % ) admiting their duty for the hazard direction procedure. Companies who negated the statement stated evidences for non set uping an internal audit map, that is due to the nature of the company ‘s concern.

4.5 Section E Accounting and Auditing

Response to Q1 provided a complete conformance of 100 % with a high mean of 1.08, of the importance of an audit commission to their company, as approved by Mangema and Chamisa ( 2008 ) while Q2 was designed chiefly to measure its credibleness in a specific company. Consequences from Table 12 illustrate that 30.8 % who strongly disagreed and 53.8 % who besides negated, provided safe decision that the magnitude of an Audit commission is no longer set into inquiry.

Q2. The ground why your company is implementing the commissariats sing audit commission is because it forms portion of the Code

Frequency

Percentage

Valid Percentage

Accumulative Percentage

Valid

agree

2

7.7

7.7

7.7

impersonal

2

7.7

7.7

15.4

disagree

14

53.8

53.8

69.2

strongly differ

8

30.8

30.8

100.0

Entire

26

100.0

100.0

Table 13 Accounting and Auditing Q2

Hypothesis 3: ‘The importance of an audit commission & A ; the ground for implementing its proviso ‘

A step of association between the variables was tested between, Q1 and Q12, to corroborate the proposition, that any company holding an audit commission was implemented, whether because it forms portion of the Code, is valid or non.

H0: There is no association between Q1 & A ; Q12.

H1: The variable Q1 & A ; Q2 are associated.

Chi-Square Trials

Value

df

Asymp. Sig. ( 2-sided )

Pearson Chi-Square

4.875a

3

.181

Likelihood Ratio

5.104

3

.164

Linear-by-Linear Association

2.586

1

.108

N of Valid Cases

26

6 cells ( 75.0 % ) have expected count less than 5. The lower limit expected count is.15.

Table 14 Chi-Square Trials between Q1 & A ; Q2

The consequences prove that since the p-value & gt ; 0.05 ( .181 ) with a 2 -tailed trial at 95 % significance degree, it confirms the fact that there is no association between Q12 & A ; Q13 thereby minimizing the execution of an audit commission merely for the interest of the codification.

Q.3 Quarterly/Monthly histories are prepared in conformity with the International Financial Reporting.

Q3 provided full conformance as to the importance of fixing fiscal statement in conformity with the IFRS sustained by the high rate of revelation in their AR.

Q4. External hearers provide an independent and nonsubjective cheque on the manner in which the fiscal statements have been prepared and presented.

Frequency

Percentage

Valid Percentage

Accumulative Percentage

Valid

strongly hold

15

57.7

57.7

57.7

Agree

9

34.6

34.6

92.3

Impersonal

2

7.7

7.7

100.0

Entire

26

100.0

100.0

Table 15 Accounting and Auditing Q4

Table 15 provides no inquiry grade on the independency of external hearers in relation to fiscal statements prepared thereby protecting the private involvement of the stockholders. While Consequences obtained 57.7 % who strongly agreed and 7.7 % who escaped a response, may foreground a major beginning of strength for effectual CG. The biggest dirt in the 21th century, Enron, was an issue which attracted international concern and involved a reputable hearer house, Arthur Anderson who served Enron as an internal every bit good as an external hearer.The house was involved in the misdemeanor of Corporate regulation and ordinance.

The MCB/NPF dirt, where internal and external hearers were for several old ages fooled was another issue. The consequences obtained from the current survey indicate non-recurrence of this state of affairs. This implies that most companies, 61.5 % have learnt lessons from recent dirts.

4.6 Section F Integrated Sustainability Reporting

Q1 of this subdivision required respondents to reply a simple yes or no and the inquiry was “ Does your company ‘s Annual Reports screen policies and patterns relative to Ethical motives, Environment, Health and Safety and Social Issues? ” As per consequences obtained, it is clear that companies are committed to the highest criterions of unity and ethical behavior in covering with all its stockholders and have developed and implemented societal, safety, wellness and environmental policies and patterns that, in all stuff respects, comply with bing legislative and regulative models and which is yearly affirmed in the ARs ( 100 % ) .

Q2 Exemplary criterions of behavior and ethical pattern should be promoted, both internally and externally for good administration.

Frequency

Percentage

Valid Percentage

Accumulative Percentage

Valid

strongly hold

18

69.2

69.2

69.2

agree

8

30.8

30.8

100.0

Entire

26

100.0

100.0

Table 16 Section F Integrated Sustainability Reporting Q2

As required by Subsection 7.3.6 the Code, 69.2 % while 30.8 % who strongly agree and agree severally suggest the importance of adopting of a Code of Ethics for efficient administration.

4.7 Section G Communication and Disclosure

Chart 8 Communication and Disclosure Q1

As stated by the Code of CG ( 2004, p.18 ) , companies are required in their AR, to confirm the extent of conformity with the codification and must place and give grounds for non conformity. From chart 8 46.2 % , disapprove and strongly disagreed revelation of non-compliance, 38.5 % refused to react. 15.4 % did supply grounds of conformity. While revelation in ARs are rather implicative of conformity ( 75.86 % ) , without of all time supplying relevant information on points being complied or, supply the revelation of equivocal or on occasion inconsistent statement of acceptance to the codification, the current study provide another image of the issue. Low degree of revelation may besides hold been attributed as a ‘private ‘ or ‘confidential ‘ nature of concern activities.

Q2.Stakeholders do non hold entree to potentially awkward and sensitive information.

Frequency

Percentage

Valid Percentage

Accumulative Percentage

Valid

agree

3

11.5

11.5

11.5

impersonal

10

38.5

38.5

50.0

disagree

13

50.0

50.0

100.0

Entire

26

100.0

100.0

Table 17 Section G Communication and Disclosure Q2

Full revelation of fiscal and non fiscal information is a demand of the Code as per Section 8.2 and consequences obtained from Table 17 shows that 11.5 % agreed that public revelation of confusing information is avoided while 38.5 % evaded a response and 50 % disagreed with the statement. The OECD ( 2004 ) framework clearly states ‘The CG model should guarantee seasonably and accurate revelation on all stuff affairs, including fiscal state of affairs, public presentation, ownership and administration of the company. ‘

The Cadbury study ( 1992 ) besides stated ‘The lifeblood of markets is information and barriers to the flow of relevant information represent imperfectness in the marketaˆ¦The more the activities of companies are crystalline, the more accurately will their securities be valued. ‘

4.8 Section H Miscellaneous Questions

Chart 9 Section H Miscellaneous Questions Q1

From Chart 9, 22 respondents stand foring 84.6 % agreed weak CG deteriorates a company ‘s possible which thereby leads to fiscal troubles and frauds. Latest high profile fiscal dirts have raised concerned about the worthiness of CG.

Chart 10 Section H Miscellaneous Questions Q2

A brawny 61.6 % agreed that good CG has added to the success and repute of their Company get awaying bankruptcy, corruptness and wastes while 38.5 % eluded an reply.

Chemical reaction to Q3: How do you experience about the present Code of Corporate Governance?

Some respondents evaded that inquiry while one of the Senior Managers provided the declared logical thinking.

‘The present Code is non the Law and hence one is non obliged to follow by it. ‘

While another expressed a different sentiment,

‘The present Code is effectual such that Top Management understands how a company should be governed decently. ‘