Financial Accountancy Essay Example | Topics and Well Written Essays - 2500 words

Financial Accountancy - Essay Example The paper will also address the limitations of financial reporting. The concept of corporate governance has evolved from olden days and undergone considerable changes from time to time. According to Solms and Solms (2008), corporate governance can be defined as â€Å"the set of processes, customs, policies, laws, and institutions affecting the way a corporation (or company) is directed, administered or controlled† (p.2). Organisational managements are always eager to update their corporate governance policies in accordance with the needs of the current business environment, because corporate governance principles influence the relationship between different stakeholder groups and the objectives of the organisation (OECD, 2004). Firms mainly focus on their corporate governance strategies to enhance economic efficiency, operational transparency, and shareholder values. As a series of corporate failures and bank collapses over the last decade were attributed to accounting fraud and poor internal check systems, today business enterprises give par ticular emphasis to improving their corporate governance policies. In addition to stating the roles and responsibilities of the board of directors, corporate governance strategies give emphasis to the rights and privileges of stockholders. As per the ICA document A history of corporate governance in the United Kingdom (2009), corporate governance developments began in UK in late 1980s and early 1990s as a result of the corporate scandals such as Polly Peck and Maxwell. Those scandals were resulted from financial reporting irregularities, and hence the government established the ‘Financial Aspects of Corporate Governance Committee’ chaired by Sir Adrian Cadbury. The Cadbury Report published in 1992 recommended a number of measures for increasing the transparency of financial reporting. In