The New Corporate Governance Structures


The most significant change in the restructuring is the heightened role of corporate internal auditors. Auditors have traditionally been viewed as performing a necessary but perfunctory function, namely to probe corporate financial records for unintentional or illicit misrepresentations. Although a majority of US corporations have longstanding traditions of reporting that their auditors operated independently of CFO approval and that they had direct access to the board, in practice, the auditors’ work usually traveled through the organization’s hierarchical chain of command.

In the past, internal auditors reviewed financial reports generated by other corporate accountants. The auditors considered professional accounting and financial practices, as well as, relevant aspects of corporate law, and then presented their findings to the chief financial officer (CFO). Historically, the CFO reviewed the audits and determined the financial data and information that was to be presented to top management, directors, and investors of the company.

Because CEOs and audit committees sign-off on financial results, auditors now routinely deal directly with top corporate officials. Approximately 75 percent of senior corporate auditors now report directly to the Board of Directors’ audit committee. Additionally, to eliminate the potential for accounting problems, companies are establishing direct lines of communication between top managers and the board and auditors that inform the CFO but that are not dependent on CFO approval or authorization.

The new structure also provides the CEO information provided directly by the company’s chief compliance and chief accounting officers. Consequently, the CFO, who is responsible for ultimately approving all company payments, is not empowered to be the sole provider of data for financial evaluations by the CEO and board.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Advertisements

Purchasing Information


Basic data that should be systematically collected include:

  • Purchase item number and description
  • Quantity required
  • Date item required
  • Date purchase requisition received or authorized
  • Purchase requisition or authorization number
  • Supplier(s) quoted
  • Date supplier(s) quoted
  • Date quotes required from supplier(s)
  • Supplier quote(s)
  • Supplier price discount schedule
  • Purchase order number
  • Date purchase order placed
  • Purchase price per unit
  • Quantity or percent of annual requirements purchased
  • Planned purchase price per unit
  • Supplier name
  • Supplier address
  • Supplier promise ship date
  • Supplier lead time (days or weeks for purchase item)
  • Date purchase item received
  • Quantity received
  • Purchase item accepted or rejected (unit/lot)
  • Storage location
  • Buyer
  • Work unit
  • Requested price change
  • Effective date of requested price change
  • Date price change approved
  • Ship to location

These basic transaction data are needed for purchasing decisions and management control systems, especially if these are computerized.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.