FNSACC506 Project: Implement & Maintain Internal Control Project

This FNSACC506 project solution provides a detailed analysis of corporate governance and internal control procedures. It includes a review of corporate governance requirements, implementation of operating procedures, and monitoring of policy. The project assesses corporate governance principles such as fairness, accountability, transparency, responsibility, sustainability, integrity, leadership, and capability. It further examines financial delegations and accountabilities within a company, specifically focusing on expenditure approvals, loan approvals, and sign-off authorities. The solution also discusses the need for new corporate governance procedures and effective monitoring mechanisms, with specific examples related to Kogan's corporate governance practices. The project emphasizes promoting ethics in business and accounting, and compliance with relevant principles. Desklib offers a wide range of solved assignments and study resources for students.

Running head: DIPLOMA IN ACCOUNTING
Diploma in Accounting
Name of the Student
Name of the University
Authors Note
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1DIPLOMA IN ACCOUNTING
Table of Contents
Assessment 1..............................................................................................................................3
Corporate Governance...............................................................................................................3
Assessment 2:.............................................................................................................................9
Part 1:.........................................................................................................................................9
Review of financial delegations and accountabilities within the company:..............................9
Expenditure or investment approvals:........................................................................................9
Corporate Governance Requirement:.......................................................................................10
Loan and Lending Approvals:..................................................................................................11
Sign off authorities:..................................................................................................................11
Determination of the timeframes:............................................................................................12
Completion within the agreed-upon timeframes:.....................................................................12
Deadlines complying with the legislative requirements:.........................................................13
Part 2:.......................................................................................................................................13
Need for New Corporate Governance Procedure that could better meet the corporate
governance requirement:..........................................................................................................13
Detailed Internal Control Procedure to meet the corporate governance needs:.......................14
Discussion of effective monitoring of procedures:..................................................................15
Variations of Corporate Governance:......................................................................................16
Assessment 3:...........................................................................................................................17
Purpose of the corporate governance recommendations:.........................................................17

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Discussion of corporate governance and compliance with the principles with
recommendations of promoting ethics in business and accounting:........................................18
Specific examples of Corporate Governance in Kogan:..........................................................19
References:...............................................................................................................................21

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Assessment 1
Corporate Governance
Corporate governance as the word suggests is the procedure, mechanism and the
relations with the help of which the business firms direct, manage and control their
operational activities. The principles and the structure of the companies recognise the
distribution of the accountabilities and the rights among the various kinds of participants in
the organizations. It is even inclusive of the processes and the rules that is used for the
purpose of undertaking decisions in accordance to the corporate affairs. Corporate
governance is even inclusive of the processes with the help of which the objectives of the
organizations are constructed and thereby pursued in the aspect of the regulatory, social and
the market environment1. The process of governance is inclusive of the supervision of the
actions, processes, policies and the decisions that are undertaken by the companies. The
practices that are associated to corporate governance are impacted by the tries to stay in line
with the interests of the stakeholders. The interests that are seen in the practices related to
corporate governance of the current companies specifically in relation to accountability.
It is seen that each and every organization are in need of a corporate governance
structure in order to maintain effective operational activities with the help of which
competitive edge can be maintained. The companies are in the lookout for satisfying their
associated stakeholders as rise in their extent of satisfaction is helpful in the development of
proper and effective operational activities2. Each and every companies and their management
1 Kraakman, Reinier, and Henry Hansmann. "The end of history for corporate
law." Corporate Governance. Gower, 2017. 49-78.
2 Allen, William T. "Our schizophrenic conception of the business corporation." Corporate
Governance. Gower, 2017. 79-99.

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need to address their governance roles with the help of understanding the role of the board,
the structure of the board and the role of the directors and the other management personnel.
The governance is even inclusive of the understanding of the essential functions of the board
and they are inclusive of monitoring, compliance, networking, decision making etc. The
efficiency of the board is even understood with the help of corporate governance. The
enhancement of the process of the board is even understood with the help of corporate
governance process3. It can therefore be said that corporate governance policies are essential
for all the companies and hence these strategies need to be incorporated by the organizations
in order to improve the operational activities and thereby satisfy the associated stakeholders.
The aspects that have been chosen is relevant to the objectives of Kogan as it is seen
that this company has been looking forward to enhance their operational activity with the
help of which the company is able to maintain competitive edge. The company has to
establish several kinds of policies with the help of which they can monitor and take care of
various kinds of actions thereby effectiveness can be maintained. The maintenance of these
strategies is fundamental for the development of the company and therefore Kogan has been
been making extensive strategies in order to enhance their level of corporate governance
structure.
There are eight kinds of principles that are associated to corporate governance and
each one of them would be explained in order to determine the effectiveness of corporate
governance.
3 Laoworapong, Mongkon, Somchai Supattarakul, and Fredric Willian Swierczek. "Corporate
Governance, Board Effectiveness, and Performance of Thai Listed Firms." AU Journal of
Management 13.1 (2018): 25-40.

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Fairness: This refers to the equivalent treatment of all the shareholders and therefore the
companies undertake the action of protect the right of the shareholders. This assists the
shareholders with the opportunity to gain efficient explanation for the violation of their
authorities and rights4.
Accountability: There are several codes that provides accountability for the Board of
Directors towards all the shareholders and thereby acts as a guidance to the shareholders in
order to undertake decisions and thereby supervising the activities of the management5.
Transparency: It is the work of the firms to provide accurate and timely explanation of the
information about all the facts and information that is associated to the operational activities
that is inclusive of the financial scenarios, environmental and social parameters, ownership
framework and free entry to these kind of information to all their stakeholders.
Responsibility: The companies are able to identify the powers and the rights of all the parties
that are interested who are allowed by the applicable individuals or the form for the
development and financial stability of their own6.
4 Kula, Veysel, and Ender Baykut. "Does better corporate governance rating lead to higher
market value?: An empirical investigation of BIST XKURY listed companies." Ejovoc
(Electronic Journal of Vocational Colleges) 5.6 (2015): 47-54.
5 Aguilera, Ruth V., and Rafel Crespi-Cladera. "Global corporate governance: On the
relevance of firms’ ownership structure." Journal of World Business 51.1 (2016): 50-57.
6 Cuomo, Francesca, Christine Mallin, and Alessandro Zattoni. "Corporate governance codes:
A review and research agenda." Corporate governance: an international review 24.3 (2016):
222-241.

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Sustainability: It is the duty of the board to develop a guidance for the business in order to
create value and therefore assign it in a fair manner and thereby reinvestment and the
distribution to the stakeholders that is inclusive of employees, customers, directors etc.
Integrity: It is the role of the board to lead the organization in order to undertake the
business in a transparent way and this in a way can withstand the assessments that have been
made by the stakeholders.
Leadership: It is essential for the companies to have a board that would management the
organizations. The companies need to course the organizations in order to meet the purpose
of the business that would be related to the long and short term plan.
Capability: It is essential for the Board of the companies to have suitable combination of the
skills, independence and experience in order to assist the members to discharge their
responsibilities in an effective manner.
All the principles that have been addressed need to be incorporated in the corporate
governance structure of the company as all these principles would be helpful in the
development of better and effective plans and strategies with the help of which Kogan can
attain their constructed goals and objectives.
The incorporation of these requirements would have a positive impact on the
development of the company. The development of the concerned company is dependent on
the effectiveness of the management. It is therefore due to this fact that the management has
been looking to make changes in their corporate governance strategies7. The application of
7 Soltani, Bahram, and Christian Maupetit. "Importance of core values of ethics, integrity and
accountability in the European corporate governance codes." Journal of Management &
Governance 19.2 (2015): 259-284.

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these governance would be helpful in the construction of several kind of committees and
these committees would be looking to take care of different kind of actions and activities so
that the overall operational activity would be enhanced. The application of these standards
would be helpful in the development of better decision making process for the company and
these decisions would be use for the development of the operational performance. These
standards are even helpful in the development of better relationship among the management
of the company and their stakeholders8. The application of these standards even leads to the
development of a better management structure and thereby different kinds of committees can
be created with the help of which the company would be able to take care of all the different
aspects of the company.
The company has their own internal control procedure and after the assessment of the
internal control procedure of Kogan and their corporate framework one can say that there are
several elements that have not been satisfied by the company. It is seen that the company
does not have a diversity policy and therefore they do not have a precise committee for the
same. It is due to this fact that the company is unable to disclose these policies to the
shareholders. Kogan does not even have a nomination committee and hence are unable to
publish the reports at the end of reporting period. The nomination committee has the
accountability to nominate any new managers and personnel and independent directors and it
is even seen that the company therefore does not have independent directors within their
management structure9. As the company does not have a nomination committee, therefore the
8 Crowther, David, and Güler Aras. "Corporate governance and corporate social
responsibility in context." Global perspectives on corporate governance and CSR. Routledge,
2016. 23-64.
9 O’Mahony, Joan, and Michael Mason. "Post-traditional corporate
governance." Globalization and Corporate Citizenship: The Alternative Gaze. Routledge,

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companies are unable to reveal the evidence and the processes the company undertakes to
explain the issues related to the board successions and to make sure that the board has
suitable balance of the experiences, skills, knowledge and diversity in order to discharge their
accountabilities and duties in an effective manner. It is even seen that the company does not
have a majority of the listed entities of the board to be the independent directors and therefore
the company does not independent directors10. Hence, the company needs to maintain
independent directors in order to improve the operational activities of the business. Therefore,
it can be said that Kogan needs to make changes in their corporate governance structure with
the help of which the companies would be able to incorporate some of the requirements and
principles that are existent in corporate governance in order to improve their operational
activities and attain the goals of companies in a precise and timely manner.
Assessment 2:
Part 1:
Review of financial delegations and accountabilities within the company:
Expenditure or investment approvals:
The expenditure and investment approvals are granted by the Chairman. The
chairman of Kogan provides that the level of inventory is set at the sustainable level and the
2017. 74-90.
10 Joseph, John, William Ocasio, and Mary-Hunter McDonnell. "The structural elaboration of
board independence: Executive power, institutional logics, and the adoption of CEO-only
board structures in US corporate governance." Academy of Management Journal 57.6 (2014):
1834-1858.

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administration remains confident that the future of the Kogan inventory investment can be
funded through the company cash flow11. The chairman and the board of Kogan have faith
that the company would continue to generate strong revenue through making investment in
brands, marketing and inventory.
During the year the Chairman of Kogan capitalized on the opportunities of the growth
and the same is reflected through investment in efficiency and the ability of the company to
attain scale. The expenditure and investment approvals are made by the Chairman of Kogan
for constant investment in expanding the private label range where pre-existing online
demand is created and the company can be the price leader with the stronger competitive
advantage.
The investment approvals by the Chairman has created automations that has driven
faster fulfilment of products and services12. The investment approvals made by the chairman
is based on the long term investment driven by data analytics. The management takes into the
considerations the historical trend of cash constraint that limits investment.
Corporate Governance Requirement:
The company secretary and joint company secretary of Kogan are responsible for the
corporate governance. Furthermore, the board of Kogan is committed to the attainment of the
highest standards of the corporate governance. The board of Kogan continuous to refine and
enhance the framework of corporate governance together with the practices of making sure
11 Kraakman, Reinier, and Henry Hansmann. "The end of history for corporate
law." Corporate Governance. Gower, 2017. 49-78.
12 Tricker, RI Bob, and Robert Ian Tricker. Corporate governance: Principles, policies, and
practices. Oxford University Press, USA, 2015.

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that the interest of the shareholders is met13. The company is in compliance with the ASX
corporate governance council and recommendations of the 3rd editions. The corporate
governance statement summarizes the corporate practices of the Kogan and incorporates the
disclosure that is required by the ASX standards. The senior management of the Kogan sets
down the charter of the board along with the key responsibilities of the senior management.
The charter of the board articulates the divisions of the accountabilities among the
board and the management. To further help the board in the executions of the responsibilities
the board has created audit and risk management committee with each of the board
committee setting out the charters. Additionally, the remuneration and the nomination
committee is accountable for reviewing the potential candidates for the directorship and
providing recommendations to the board14. In compliance with the charter of the board, the
appointment of the new directors of Kogan is made by the key terms and conditions that is
relating to the appointment of the company secretary.
Loan and Lending Approvals:
The loans and lending approvals are made by the directors in assessing the capability
of the organization to constantly continue as the going concern. The directors of the
organization possess the reasonable amount of anticipations that the company would continue
13 McCahery, Joseph A., Zacharias Sautner, and Laura T. Starks. "Behind the scenes: The
corporate governance preferences of institutional investors." The Journal of Finance 71.6
(2016): 2905-2932.
14 Armstrong, Christopher S., et al. "Corporate governance, incentives, and tax
avoidance." Journal of Accounting and Economics 60.1 (2015): 1-17.

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to possess sufficient amount of financial resources to constantly meet its responsibilities15.
The loans and the receivables are the non-derivative financial assets that are subsequently
measured by the directors prior to the approvals. The directors limit the facilities of the loan
facility conditions and convent ants whenever applicable.
Sign off authorities:
The sign off authorities of Kogan represents the Key Management Personnel that the
possess the authorities of signing off of the group activities either directly or indirectly. This
generally comprises of the directors and the senior executives of the company16. The directors
of the company are regarded as the sign off authorities that are in accordance with the
resolution of company issue the authorised financial report. The directors are held as the sign
off authorities relating to the taxation issue.
The directors are the sign off authorities of the legally enforceable right of setting off
the deferred tax assets and liabilities associated to the income tax that is levied by the
identical taxation authority. Furthermore, the key management personnel are held as the sign
off authorities regarding the declaration of the dividend following appropriate authorization
of the directors17. The company describes that apart from the directors the key management
15 Du Plessis, Jean Jacques, Anil Hargovan, and Jason Harris. Principles of contemporary
corporate governance. Cambridge University Press, 2018.
16 Boreiko, Dmitri, and Maurizio Murgia. "Corporate Governance and Restructuring Through
Spin-Offs: European Evidence." The Financial Crisis. Springer, Cham, 2016. 7-47.
17 Larcker, David, and Brian Tayan. Corporate governance matters: A closer look at
organizational choices and their consequences. Pearson Education, 2015.