- 20 Marks
SCS – L3 – Q6- Professional practice and codes of ethics
Question
(a) The personal qualities as well as the professional qualities of an accountant can influence his/her role in the strategic management process. Outline FIVE (5) personal or professional qualities expected of an accountant.
(b) Ghana’s corporate governance environment has been influenced by the principles of governance published by the Organisation for Economic Cooperation and Development (OECD). These principles deal mainly with performance problems that result from the separation of ownership and management of a company. Explain FIVE (5) principles of corporate governance.
Answer
(a) Five personal or professional qualities expected of an accountant in strategic management:
- Integrity: Accountants must uphold honesty and ethical standards, ensuring financial reports are accurate and transparent to maintain trust.
- Analytical Skills: The ability to analyze financial data and provide insights is crucial for informed strategic decision-making.
- Attention to Detail: Precision in handling financial records ensures accuracy in reporting and compliance with regulations.
- Communication Skills: Accountants need to clearly convey complex financial information to non-financial stakeholders to support strategic planning.
- Professional Skepticism: A questioning mindset helps accountants identify risks and ensure the reliability of financial information.
(b) Five principles of corporate governance based on OECD guidelines:
- Ensuring the basis for an effective corporate governance framework: The framework should promote transparent and efficient markets, be consistent with the rule of law, and clearly articulate the division of responsibilities among different supervisory, regulatory, and enforcement authorities.
- The rights of shareholders and key ownership functions: Shareholders should have the right to participate in, and be sufficiently informed on, decisions concerning fundamental corporate changes, such as amendments to the company’s statutes or articles of incorporation.
- Equitable treatment of shareholders: All shareholders, including minority and foreign shareholders, should be treated equitably, with mechanisms to address any violations of their rights.
- The role of stakeholders in corporate governance: The governance framework should recognize the rights of stakeholders established by law or mutual agreements and encourage active cooperation between corporations and stakeholders in creating wealth, jobs, and sustainability.
- Disclosure and transparency: Companies should ensure timely and accurate disclosure of all material matters, including financial performance, ownership, and governance, to enable informed decision-making by stakeholders.
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