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corporate governance

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AA Exams › corporate governance

  • This topic has 5 replies, 2 voices, and was last updated 3 years ago by Kim Smith.
Viewing 6 posts - 1 through 6 (of 6 total)
  • Author
    Posts
  • October 23, 2021 at 9:21 am #638854
    abokor
    Participant
    • Topics: 82
    • Replies: 114
    • ☆☆

    sir, what do they mean by independent NED exactly?. And is it allowed the chairman to be a member of subcommittees i.e. audit committee

    Thanks.

    October 23, 2021 at 9:50 am #638857
    Kim Smith
    Keymaster
    • Topics: 134
    • Replies: 8304
    • ☆☆☆☆☆

    See page 13 of the notes …. “The chair is responsible for leadership of the board ….” and on page 14 of the notes …. “The board should establish an audit committee of independent NEDs.”
    So on page 15 of the notes … “the chair of the board should not be a member [of the audit committee]”

    An independent NED is independent of management – i.e. should not have been an employee of the company/group within the last 5 years, should not have a material business relationship with the company, should not have close family ties with advisers, directors or senior employees, should not have significant links with other directors, should not represent a significant shareholder and should not have served on the board for more than 9 years.

    October 23, 2021 at 10:24 am #638876
    abokor
    Participant
    • Topics: 82
    • Replies: 114
    • ☆☆

    well understood ?.

    another question sir. what are the save gauds to self interest, familiarity and intimidation threats coursed by offering recruitment services to the client.

    Thanks.

    October 23, 2021 at 11:28 am #638887
    Kim Smith
    Keymaster
    • Topics: 134
    • Replies: 8304
    • ☆☆☆☆☆

    If in doubt – avoid – then safeguards are irrelevant https://opentuition.com/topic/threat-on-audit-firm-recuritement-services

    If you do provide – take measures to ensure that management assumes responsibility for all decisions/actions https://opentuition.com/topic/ethics-assuming-management-responsibility

    It’s not necessary to distinguish different safeguards for each category of threat – it would depend on the specific “recruitment service” whether the threat is self-interest and/or familiarity and/or intimidation. Having a separate department to provide “recruitment services” with staff completely distinct from the audit team is likely to be appropriate.

    October 23, 2021 at 6:33 pm #638935
    abokor
    Participant
    • Topics: 82
    • Replies: 114
    • ☆☆

    understood, Kim
    Thank u so much for providing the additional information.

    October 24, 2021 at 8:20 am #638959
    Kim Smith
    Keymaster
    • Topics: 134
    • Replies: 8304
    • ☆☆☆☆☆

    You’re welcome!

  • Author
    Posts
Viewing 6 posts - 1 through 6 (of 6 total)
  • The topic ‘corporate governance’ is closed to new replies.

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