FINA6000 - Finance Report: Corporate Governance and Audit Review

This report analyzes the corporate governance practices of Tupperware Brands Corporation, focusing on conflict of interest, corporate opportunities, fair dealing, and securities law matters. It critically reviews the independence of PricewaterhouseCoopers LLP as the company's auditor, examining ...Read More

Running head: MANAGING FINANCE
Managing Finance
Name of the Student:
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Table of Contents
Introduction................................................................................................................................3
Critical review related to corporate Governance matters...........................................................3
Critical review on the independent of the Auditor of the company...........................................4
Split in position of chairman and CEO and its impact...............................................................6
Conclusion..................................................................................................................................7

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Introduction
In this report, an attempt is made to analyse the information provided in the annual
report of Tupperware Brands Corporation. It is an American multinational company engaged
in direct sales. The report critically reviews the board and the executive management with
respect to the matters related to corporate governance. The report also critically reviews the
independence of the Auditor of the company (Deng & Chen, 2017). In addition to this, the
report also highlights the issues whether there the position of the chairman and the CEO of
the company is split and its impact on matters related Corporate Governance.
Critical review related to corporate Governance matters
The corporate governance documents provides details code of conduct for board and
the Executive management of the company. The critical review is provided below:
a) Conflict of interest:
Each individual associate is required to exclude his own personal interest in
performing his duties. All the business transactions must be entered into with the
purpose of executing the interests of the company. It is prohibited from any
associate to take advantage of his position from any purchase, any sale and other
activity of the company.
b) Corporate opportunities:
It is prohibited for all the directors, officers and associates A) to take the
opportunities for themselves that have arisen due to company’s properties,
information or position in the market. B) To use the corporate property, position
or information from their personal gains. C) To enter into competition with the
company.
c) Fair dealing:

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It is expected from all the directors, officers and associates of the company to deal
fairly with the company’s customers, suppliers, competitors and all the other
associates (Das, 2017). It is strictly prohibited for all them to take undue
advantage of any of the stakeholders of the company by way of manipulation of
data, concealment of the obtained data, abusing the acquired information and
misrepresentation of the material facts obtained.
d) Securities law matters:
The material inside information of the company cannot be utilised for the personal
gains at any cost without exercising due discretion and only after getting proper
authorisation. Use of material insider information to engage in the trading of
company’s securities is not only violation of the code of the company but is also
illegal as per the Securities law matters and may result in severe civil and criminal
penalties (Doherty et al., 2014). The provision is also applicable in case of trading
in securities of the company having close relationship with the company like the
vendors and customers of the company. Information has to considered material if
it can affect the economic decision of the shareholders and it has to be considered
as insider if the information has not been disclosed to the general public.
Critical review on the independent of the Auditor of the company
In order to determine the independence of the audit-or the procedure applied by them
and the Corresponding disclosure statements can be studied in detail to understand the
amount of independence and objectivity exercised by them. The disclosure presented by the
auditors of the Tupperware Brands goes as follows:
It is the auditor’s responsibility to present their opinion on the financial statements, financial
schedule and on the internal control placed by the management in preparation of the financial

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reports that will be judged by the integrated audits by the auditor. The auditing firm has
disclosed that it has performed the audit in accordance with the guidelines issued by Public
Company Accounting Oversight Board (United States). The firm further clarifies that the
standards require them to plan and perform the audit with the motive of obtaining reasonable
assurance that the financial statements of the company are free from material misstatements.
It is also that the adequate internal control has been exercised by the company in preparation
of the financial statements and in all material aspects of the company (Gitman et al., 2015).
As per the disclosure by the auditing firm its audit of financial statements included the
following:
a) Examining using test basis, the evidences available with respect to the amounts and
disclosures given in the financial statements.
b) Assessment of the various accounting principles used
c) Assessing the propriety of various significant estimates made by the management.
d) Evaluation of the overall financial statement presentation.
In respect of audit of the internal control exercised over the preparation of the financial
statements the following disclosures are given by the auditing firm:
a) Developing an understanding regarding the internal control in place for financial
reporting.
b) Assessment of the risk that a material misstatement exists.
c) Conducting tests and evaluation of the design and resultant effectiveness of the
internal control measure in response to the presence of the assessed risk (Crane &
Matten, 2016).
d) Performing other audit procedures in accordance with the demand of the situation.

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It can be observed that the procedure conducted and undertaken by the auditing firm i.e.
PricewaterhouseCoopers LLP has exercised complete independence in undertaking the audit.
The opinion presented by them have reasonable basis behind them.
Split in position of chairman and CEO and its impact
The position of the chief executive officer and the chairperson is not split in the
organisation. This feature signifies the following:
a) Executive compensation:
It is a common known fact that the increase in the executive pay catches everyone’s
eyes. The main reason for this is that the pay is a deduction in the shareholder’s
profits. Although it is known by the shareholders that a competitive pay is necessary
to keep talented people in the workplace (Dick et al., 2017).
As the CEO of the company is also the chairman some conflict of interest is bound to
rise. This is because of the fact that the CEO is practically voting for his own
remuneration. It is possible for the chairperson to influence the decision making
process of the Board which would culminate to abuse of the power of the chair.
b) Corporate governance:
One of the most important roles of BOARD is to ensure that the action and the
operations of the business are in conjunction with the company’s motives and the will
of the shareholders. Holding a CEO position means taking up the task of fulfilling
these objectives. At the same time being the Chairperson means monitoring your own
operations (Vernimmen et al., 2014). This could lead to violation of the powers
granted to the individual. A company which is led by independent directors is more
reliable in terms of detection of the deviations and the corresponding actions.
c) Audit committee independence:

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It is a statutory requirement that the audit committee will be constituted only of
external board members (Kothari et al., 2015). This prohibits any board member to sit
on the audit committee. However the committee is only a sub group of the board of
directors and is accountable to report to only the chair, a CEO holding the position of
the chairperson restricts the effectiveness of the committee.
Conclusion
On analysing the above report, it can be concluded that the report has successfully
answered the issues raised in the beginning of the report. It can be seen that the board and
executive management has successfully addressed the corporate governance matters. It can be
concluded from the above report that PWC has conducted the audit independently. The
position of the chairman and the CEO of the company are not split as it can cause conflict of
interest.

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Reference
Crane, A., & Matten, D. (2016). Business ethics: Managing corporate citizenship and
sustainability in the age of globalization. Oxford University Press.
Das, D. K. (2017). Book review: Macroprudential Regulation of International Finance:
Managing Capital Flows and Exchange Rates.
Deng, A., & Chen, Z. (2017). Managing Online Supply Chain finance Credit Risk of
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Dick, P., Faems, D., & Harley, B. (2017). An Introduction to the Special Issue on Managing
Complexity within and Across Organizational Boundaries. Journal of Management
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Doherty, T. L., Horne, T., & Wootton, S. (2014). Managing public services-implementing
changes: a thoughtful approach to the practice of management. Routledge.
Gitman, L. J., Juchau, R., & Flanagan, J. (2015). Principles of managerial finance. Pearson
Higher Education AU.
Kothari, S. P., Mizik, N., & Roychowdhury, S. (2015). Managing for the moment: The role
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Accounting Review, 91(2), 559-586.
Vernimmen, P., Quiry, P., Dallocchio, M., Le Fur, Y., & Salvi, A. (2014). Corporate finance:
theory and practice. John Wiley & Sons.