Duties, Rights, and Competences of a Director in ABC Limited

This report provides an overview of the duties, rights, and competences of a director in ABC Limited. It discusses the committee work, board structure, and transparency of the company. Additionally, it provides insights into the financial position of ABC Limited.

MBA case study report

EXECUTIVE SUMMARY
The project report is based on a company that is ABC limited. The report summarizes
about duties and rights of director of a company and these aspects are linked to chosen company.
Along with report abstracts about committee work of audit council and various kinds of
framework of each element of auditing. The further part of report abstracts about transparency
and accountability of prepared financial statement of selected business entity that is ABC
limited.

Contents
EXECUTIVE SUMMARY.........................................................................................................................3
INTRODUCTION.......................................................................................................................................5
MAIN BODY..............................................................................................................................................5
1. Duties, rights and competences of a director...................................................................................5
2. Committee work..............................................................................................................................7
3. Board structure and style.................................................................................................................9
4. Transparency and accountability of the company..........................................................................10
CONCLUSION.........................................................................................................................................11
REFERENCES..........................................................................................................................................13

INTRODUCTION
The report of the auditor shall be a formal view, or a dismissal, approved as the secret
services for the client to adopt decisions quality of audit outcomes by an inner or an external
independent auditor (Li, Hay and Lau, 2019). The project report is based on a company that is
ABC limited that manufactures electronic and telephonic gadgets. In the report an auditor’s
report prepared that consists different types of information such as duties of director, committee
work, transparency and accountability of company.
MAIN BODY
1. Duties, rights and competences of a director.
Two individuals – the owners and its board of directors – are accountable for an
organization. The management of a business is under the responsibility of the Board of
Directors, buying the government's strategic decisions, and guaranteeing the company
fulfills its legal obligations. The job as a director is to take part in board meetings to
encourage the board to take certain decisions and to ensure that the responsibilities of the
organization are fulfilled.
Duties of a director- Director of ABC limited has below mentioned duties such as:
 Fiduciary duties- The director is a shareholder of the corporation. The role of fiduciary
relates to faith and honesty. Directors are required to act honestly and responsibly in their
fiduciary role. In the ABC limited this is the duty of director is to maintain trust of
different shareholders in company.
 Duties of care, skills and diligence- The duties of service and the skills of the Director in
the Businesses Act are not accounted for explicitly. In fact, the court adopted the rulings
of England and the laws of the common law (Naritomi, 2019). A director must ensure
that the business of the company is conducted by an ordinary person. He is not an
insurance company’s success. The role of a director was created to compel him to behave

with such caution as his expertise and experience is fairly required of him. The director
of above company has duty of maintaining proper skilled employees inside. The
executives are not responsible for mere judgment mistakes. They are not obliged to keep
an eye on the company. A manager is only responsible for gross and guilty faults. On the
other hand, management executives and managing directors / whole-time directors are
expecting a much greater degree of expertise and commitment to the company.
 To be free of planning and of any company or other connection that could substantially
impair the exercise of their individual responsibility. This is one of the main duties of
director of ABC limited.
 Director of ABC limited may be liable for penalties if the business does not fulfill its
official obligations. They may, even so, have a defense system if they have reasonable
cause to believe that a potential employee has been obliged to ensure compliance with the
statute law.
Rights of a director- Director of ABC limited has rights that are as followings:
 Right to inspect the books- The director of ABC limited has right to inspect all books and
records. This is so because he is only person who can create new strategies and policies.
Director can inspect books like financial statements (Buzarna-Tihenea, 2019). In order to
facilitate perform his or her directing style duties, the director has a general right of
access to records held by shareholders in time. In practice, boards often have a broad
access right so that the director can perform his duties appropriately. Under common law,
a director has the right to inspect and copy the company's books and accounts. The
director is allowed to practice this privilege directly or to use the correct agent for the
inspection.
 Right to elect chairman- In addition director of ABC limited has right to select the
chairman. He can choose chairman by own selection process and methods.

Core competencies of director-
 Industry knowledge- One of the main competences of a board member is his expertise
and understanding of the field in which the company functions. This is important to
accomplish the organization's goals when functioning effectively, professionally,
lawfully and sustainably. As the director of ABC limited has proper knowledge about
telephonic industry.
 Technical skills- In order to develop plans and make intelligent choices, directors have to
be able to obtain analysis, define and use the data quickly (Müllerová and Šindelář,
2019). The person must have awareness of diverse aspects to assess the possessions of
such skills. Director of ABC limited has enough technical skills regards to effectively
manufacturing of electronic items at lower cost.
2. Committee work.
The primary aim of the audit committee of a corporation is to supervise the financial
reporting, the effectively monitor, the internal management team of the organization and
adherence with law and policies (Sahyda, 2019). CPAs are also referring to the audit committee
explicitly and not to the board. In order to better understand the prospective impact on financial
declarations, the audit Committee may anticipate to research recommended accounting and
management issues as well as results were noted and legislative pronouncements. It is important
to understand how leadership progresses inner interim financial data in order to assess whether
the findings are truthful and correct.
The Council of Auditors (the Jury), which has the jurisdiction and refers to it on a
daily basis, is a Board of Directors of ABC limited (the Company).
CONSTITUTION AND PROCESS:
 Quorum- Two members will be the quorum of the Committee. If there is a problem with
this Quorum success by autonomous Non-Executive Officers not leaders. As Members
for specific sessions, the Group can be co-opted (Czerney and Sivadasan, 2019). A proper

meeting the Committee meeting at which there is a quorum shall be responsible for
exercising all or all of the laws, competences and discretions of the audit Committee.
 Chairman- the Committee would be headed by an impartial Non-Executive Director
named by the Company. If the Chairman or the assigned Deputy is not present, the
remainder. The present representatives shall nominate to chair one of them. In the ABC
limited, Mr. Y. K. Chan is proposed to become chairman in accordance of president.
 Secretary- All meetings of the Company Director and/or Assistant Manager. The
Subcommittee must provide the Subcommittee with any appropriate resources. The
Committee will ensure reception by the Secretary and/or Assistant Secretary. Information
and documents in good time to allow full and adequate consideration of things.
 Attendees- Gatherings of the Committee might be gone to by the Chairman of the Board,
the Group Chief Official, the Chief Financial Officer and his agents, the Group General
Counsel, the Chief Audit and Risk Officer, agents of the outer examiners and different
Directors, workers and outsiders at the greeting of the Committee.
 Meetings- the Committee will normally meet five times a year. Two of those meetings
will be
scheduled so as to allow the Committee to consider the Group’s half-year and full-year
results. Ad hoc meetings may also be held. The Chairman or any member of the
Committee or the Company Secretary may convene a meeting of the Committee at any
time on reasonable notice to consider any matter falling within these Terms of Reference.
 Disclosure- The enrollment of the Committee and a depiction of its obligations and
exercises during the year will be unveiled in the Annual Report of the Company (BOOK,
2019). The Chairman of the Advisory group, or a representative browsed its participation,
will be accessible at the Annual Comprehensive gathering of the Company to respond to
addresses which identify with crafted by the Council.
 Scope of authority- The Committee is a committee of the Board to which it will report on
a regular basis. The Committee is concerned with the business of the entire Group and its
authority extends to all relevant matters relating to ABC limited and its business units and
subsidiaries. The Committee may sub-delegate any of its forces and authority as it sees
fit, including, without impediment, through the foundation of sub-boards of trustees to
consider specific issues and report back to the Committee (Hurley, Mayhew and

Obermire, 2019). The Committee has power to examine any issues inside its duties and to
acquire such data as it might require from any executive, official or representative of the
Group and may call any chief, official or worker of the Group to go to any gathering of
the Committee as and when required. The Committee has position to acquire outside
lawful or other autonomous expert exhortation at the Company's cost and to protect the
participation of outcasts with pertinent experience and aptitude as important. The
Committee will reserve the privilege to commission examines and some other important
market information, at sensible expense to the Company, which it thinks about
fundamental in the presentation of its obligations.
 Training- The Committee will make a reasonable acceptance process accessible to new
individuals from the Advisory group through the Company Secretary and, for existing
individuals, will make accessible progressing preparing where fitting and as examined
with the Committee (Levanti, 2019).
 Membership- Membership will comprise at least three independent Non-executive
Directors of ABC limited (the Company), to be nominated by the Board from time to
time. The Committee as a whole shall have competence relevant to the sector in which
the Company operates and at least one member of the Committee shall have recent and
relevant financial experience. The Chairman of the Company may not be a member of the
Committee.
3. Board structure and style.
A directorate (B of D) is a chosen gathering of people that speak to investors. The board
is an administering body that ordinarily meets at standard spans to set approaches for corporate
administration and oversight (Palanimally, Ramasamy and Mohamad, 2019). Each open
organization must have a governing body. Some private and charitable associations additionally
have a top managerial staff. A top managerial staff (B of D) is a chosen gathering of people that
speak to investors. The board is an administering body that normally meets at customary spans to
set strategies for corporate administration and oversight. Each open organization must have a top
managerial staff. Some private and not-for-profit associations additionally have a top managerial
staff. All in all, the board settles on choices as a trustee in the interest of investors. Issues that fall

under a board's domain incorporate the recruiting and terminating of senior administrators, profit
strategies, choices arrangements, and official pay. Notwithstanding those obligations, a top
managerial staff is answerable for helping an organization set wide objectives, supporting
official obligations, and guaranteeing the organization has satisfactory, all around oversaw assets
available to it.
Herein, below board structure and style of ABC limited is mentioned in such manner:
Executive director Position
Alan K M. Yau President
Peter Y. M. Chow Vice President
Charles K. K. Lau Director Operations
Johnny Y. K. Ho Director Finance
Dr. Andy H. S. Woo Director Development
Rebecca H. S. Sun Director Personnel
Independent non-executive directors - Abraham P. K. Lau Frederick W. L. Ho
This table is indicating that there is a complete committee of members of ABC limited.
4. Transparency and accountability of the company.
This is essential for companies to keep their financial statements transparent and
accountable. It is so because any error in prepared financial statements may lead to many
problems for stakeholders (Liao, Minutti-Meza and Zou, 2019). Accessibility and
accountability go hand and hand; accountability is generated by openness, which
contributes to substantive action. Once a company has a clear understanding of how the
authorization process works, it decides who is responsible for each process. It just means
analyzing who opened a file, how far it is read, what measures they took in it – and what
is the procedure. It is much easier for everyone to stay to the same length and to push the
cycle ahead once they realize who's accountable for taking choices, how these policy
holders are met and how the consent system functions as a whole.

Financial position of ABC limited
In the most recent distributed records the executive of the board announced that
turnover in 2004 had surpassed desires at $237,632,000, yet that benefits were lower than
examiners' desires, at $6,693,000, because of coincidental discounts of old stocks. The
organization didn't deliver a profit this year, furrowing back benefits into item
advancement and growing creation limit.
The speculation report expresses that Gold barb is the holding organization for the
establishing family's interest in ABC and that Transelec is the Australian joint endeavor
accomplice. Transelec is the entirely claimed auxiliary of an organization fused in
Delaware in the United States and recorded on the New York Stock Exchange.
Straightforwardness and responsibility should be incorporated with a business' way of life, from
the official level down. Everybody in a group should be responsible for overseeing explicit
strides all the while – and every other person in the office has to realize which steps stay to be
finished, and who's liable for finishing them (Yau, 2019).
In addition, company has different amount of shares into above mentioned plc. There are mainly
two companies which are Goldbarb and Transelec. Both have different % of shares in company
that are 39.8% and 15.6 % respectively.
The speculation report expresses that Goldbarb is the holding organization for the establishing
family's interest in ABC and that Transelec is the Australian joint endeavor accomplice.
Transelec is the entirely possessed auxiliary of an organization consolidated in Delaware in the
United States and recorded on the New York Stock Exchange.
CONCLUSION
On the basis of above project report this can be concluded that auditor’s report is too
crucial for companies. The report concludes about roles and duties of a director of given
company included in the case study that is ABC limited. The further part of report articulates

about committee work of auditing council under which various kind of aspects are included such
as role of chairman, secretary in entire auditing process. Along with board of director committee
is also demonstrated in the report that includes name of board of director and their position. The
end part of report concludes about transparency and accountability of prepared financial
statement of ABC limited.

REFERENCES
Books and journal:
Li, H., Hay, D. and Lau, D., 2019. Assessing the impact of the new auditor’s report. Pacific
Accounting Review.
Naritomi, J., 2019. Consumers as tax auditors. American Economic Review, 109(9), pp.3031-72.
Buzarna-Tihenea, A., 2019. Written Business Communication. Case Study: Auditor’s
Report. Ovidius University Annals, Economic Sciences Series, 19(1), pp.140-147.
Sahyda, R., 2019. Key Audit Matters in Enhanced Auditor’s Report: Tracing Malaysia in Its
First Year Implementation.
BOOK, P., 2019. Auditor’s Report & UBCM Budget Convention Finance & Sponsorship
Review Backgrounder. POLICY.
Levanti, D.A., 2019. Aspects Regarding the Changes to the Independent Auditor's Report. The
Case of Public Interest Entities. Audit Financiar, 57(155).
Palanimally, Y.R., Ramasamy, M. and Mohamad, Z.Z., 2019. THE
STAKEHOLDERS’PERCEPTION ON INTERNAL AUDITOR’S REPORT AND
GOVERNANCE TRANSPARENCY IN MALAYSIA. International Journal of
Accounting, 4(24), pp.13-23.
Liao, L., Minutti-Meza, M., Zhang, Y. and Zou, Y., 2019. Consequences of the Adoption of the
Expanded Auditor’s Report: Evidence from Hong Kong. Available at SSRN 3392449.
Yau, L.N.B., 2019. Learning from Expert: A Textual Similarity and Topic Study of Expanded
Auditor’s Report in the United Kingdom (Doctoral dissertation, The Chinese University
of Hong Kong (Hong Kong)).
Hurley, P.J., Mayhew, B.W. and Obermire, K.M., 2019. Realigning auditors' accountability:
Experimental evidence. The Accounting Review, 94(3), pp.233-250.
Czerney, K. and Sivadasan, P., 2019. The Relative Influences of Officers and Auditors on
Annual Report Textual Disclosures. Available at SSRN 3376040.
Müllerová, L. and Šindelář, M., 2019. Auditor’s responsibility in relation to transfer
pricing. Český finanční a účetní časopis, 2019(2), pp.21-36.