Contemporary Issues in Accounting

CONTEMPORARY ISSUES IN ACCOUNTING
CONTEMPORARY ISSUES IN ACCOUNTING
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CONTEMPORARY ISSUES IN ACCOUNTING
Introduction
Corporate governance is at the core of every organization’s growth. This role is greatly vested in
a company’s board of directors. The board is tasked with setting values, policies, and strategies
that govern the operations of the company. These policies are aimed at promoting transparency,
accountability, and efficiency in managing the organization.
Task 1
The concept of social responsibility accounting refers to accounting practices of incorporating
non-financial measures into financial reporting. It entails incorporating ethics and social
responsibility of a company to its stakeholders in her financial reporting mechanisms. The
purpose of social responsibility accounting is to ascertain and disclose the cost and benefit
created by the operations of the company to the society and her stakeholders at large. It is,
therefore, necessary that organization explore better mechanisms of incorporating their social
accounting to enhance accountability and sustainable economy (Guthrie, Ball, and Farneti, 2010,
p. 454). Corporate governance, on the other hand, refers to mechanisms, strategies, and policies
that define how the operations of the company are controlled. It clearly outlines the objectives
and goals that the company would pursue and by essence, it is the strategic plan of an
organization (Goergen, Marc, 2012). Corporate governance is mainly steered by the board of
directors who are mandated the corporate governance by the shareholders.
Task 2
Code of corporate governance refers to a set of standards that guide good practices in an
organization on pertinent issues regarding leadership, board composition, auditing,
accountability, remuneration, and shareholders’ interests. Listed companies are required through

CONTEMPORARY ISSUES IN ACCOUNTING
the Companies Act to report on whether they have complied with these standards in their
operations or not. In the case where the company has not complied, it should provide an
explanation as to why it failed to comply. These standards promote effectiveness within the
company. It ensures that the board and all committees have a balance of skills, independence,
and capacity to discharge their duties effectively. It also ensures that accountability is upheld by
the board by presenting a true and fair state of affairs of the company to the shareholders. The
standards also outline that remuneration and performance-based elements need to be formulated
to promote the success of the company on a long-term basis.
Task 3
Retention of key and performing executive members of the board is key for any organization that
has a long-term growth strategy. The organization should put in place measures that retain them
and one common measure is by offering a competitive remuneration package to them. This
includes basic salary and offering them competitive allowances. The remuneration scheme
should be restructured to include performance-based bonuses. This will act as an incentive to
them to work and maximize shareholders wealth which is in line with the long-term goal of the
company (K. Murphy, 2012). These performance-based bonuses may be in the form of cash or
share options. Share options make the executives part of the company and thus will motivate
them to work hard as besides maximizing the wealth of the company, they will maximize their
wealth to being part of the company. Therefore these measures should be considered to boost
performance as well as retain the hardworking executives in the company.