Auditors Responsibilities on!Globalization          Gholamhossein Davani Member of High council of Iranian association of ...
Ladies & Gentelman. I am very glad to have the opportunity to  speak at this conference, as it gives me  the chance to str...
:GlobalizationIs an undeniably capitalist process. It hastaken off as a concept in the wake of thecollapse of the Soviet U...
Globalization in the era since World War II has beendriven by trade negotiation rounds, originally underthe auspices of GA...
What is GlobalizationGlobalization as a decoupling of spaceand time, emphasizing that withinstantaneous communications,kno...
Left critics of globalizationdefineThe word quite differently, presenting itas worldwide drive toward a globalizeeconomic ...
?What is GlobalizationA sense that the world was united wasgenerated by the establishment of theInternational Date Line an...
What is Globalization:Economically,socially, and ecologically negative";As an engine of "corporate imperialismone which tr...
BackgroundThe first great expansion of European capitalismtook place in the 16th century, following the firstcircumnavigat...
How Globalization BirthThe end of the Second World War broughtanother great expansion of capitalism withthe development of...
New world DisciplineThe fall of the Berlin Wall and thecollapse of the Soviet Union ended thecold war between the forces o...
World CapitalismOne of the main sources of globalization is the viewamong activists that "international capitalism isnothi...
International businessMultinational companies face special issues in relation toethical auditing. It is, though, precisely...
The elements of an effective global:financial reporting infrastructure include   effective, independent and high quality ...
Developments in InternationalFinancial Reporting    In the last three years, there has been a tremendous change in the    ...
Social responsibility•   Community•   Diversity•   Environment•   Ethics•   Financial Responsibility•   Human Rights•   Sa...
Point of beginning Since the 1980s, government and business have been called on to espouse a range of responsibilities vie...
Social ResponsibilityThe currency and general relevance of socialresponsibility and sustainable development(SR/SD) to soci...
Social AccountingIn the years since the summit, someaction has been taken by accountingbodies to protect the environment o...
World Ethical AuditingWorld ethical auditing is a process whichmeasures the internal and externalconsistency of an organiz...
Ethical AuditThe ethical audit will result in the identification of (actual) organizational values on the one hand, and in...
Professional activitiesThese efforts include reports issued by theFinancial Accounting Standards Board and theCanadian Ins...
SR /SDThe currency and general relevance ofsocial responsibility (SR) andsustainable development (SD) tosociety is seen in...
What are SR/SDThese are voluntary initiatives with a global constituency that can also be defined as multi-sect oral, in t...
Elements of SR/SDEach initiative is described below and comparedwith the others. Many of the initiatives have acommon star...
History of GlobalReportingThe Global Reporting Initiative (GRI) wasconceived in 1997 by the Boston-based Coalitionon Envir...
What is GRIThe GRI has been adopted by the UN Environment Programmed (with funding from the UN Development Fund) and is be...
The Global Eight1-The U N Global Compact2- ILO conventions3- The OECD Guidelines for Multinational Enterprises4- ISO 14000...
Principles and standardsThe Global Eight may be divided into principles andstandards.Principles are a set of overarching v...
Standards Stage   Process   Performance   Foundation   Certification                    30
ProcessProcess standards define theprocedures a company should put inplace, such as how to conductstakeholder dialogue, ho...
Process standards define the procedures a company should put in place,such as how to conduct stakeholder dialogue, how to ...
It is possible for standards to have:several of these characteristics  • Principles (Global Compact and Global Sullivan Pr...
SA/CSRAfter Enron Clops some terminologies sameSocial audit (SA), corporate socialresponsibility (CSR) have been relief. T...
The financial scandals in a number ofmajor companies have led to demandsFor “accountability”. In fact, variouscorporations...
   Freedom of association and the right to collective bargaining, enshrined   In two of the fundamental Conventions of t...
Corporate Social Responsibility (CSR) encompasses anorganization’s commitment to behave in aneconomically and environmenta...
Detail of Social AuditingSocial Auditor will work on thecomponents of a companys SocialPolicy (Ethics, Labor, Environmenta...
Ethicsvalues the company vows to respect. Policies include the pledgenot to participate in (nor engage in business with pe...
Labour   creation of a working environment allowing all    employees to develop their potential. Policies include    trai...
Environment   monitoring and reduction of the damage caused to the    environment. For instance, policies of reduction of...
Human Rights   making sure the company does not violate human    rights nor appears as supporting human rights    violato...
Community investment in its local community. Policies include partnerships with voluntary local organizations, with financ...
Society investment or partnership beyond the community. For instance, Cause Related Marketing (partnership with a charity ...
ComplianceIdentification of all legal obligations and of the means to comply. Policies must deal with changing rules relat...
The ILO has defined core labour standards:which includeFreedom of association (Convention 87)Right to collective bargainin...
Social Responsibility                                                                               In the globalization a...
The company must be totally involved in the Audit. The IndependentSocial Audit is neither an inspection (for which the com...
Who is independent Social AuditorThe first step is to have an IndependentSocial Audit, either Defensive (to preventlawsuit...
The conceptualframeworkIn contrast to social auditing which aims primarily atmeasuring the social impact of a company on i...
AccountabilityThe objective of accountability towardsstakeholders requires information aboutgeneral issues such as product...
Corporate Governance The good corporate governance needs to address not only boards of directors, committees, and legal an...
Sustainable CompanyThe systems and processes of corporate governancealso should consider a diverse group ofstakeholders, n...
Creation of a SocialPolicy Most companies (if not all) already haveelements of Social Policy. Often, these areindependent ...
Conclusion“Auditor’s social responsibility” & “ethical audit “  will have particular benefits for multinational  companies...
Sources1- Social responsibility, Peter Easley, Esq, world bank group.2- Stockholder Engagement standard, Institute of Soci...
Dr. Gholamhossein DavaniB.SC. Cost AccountingEM.B.A, PHD Business AdministrationIACPA, IICA, IMA, AAA, BAA, EAA, IIA,AFA,C...
Upcoming SlideShare
Loading in …5
×

Auditors' responsibilities on globalization!

1,722 views

Published on

Published in: Business, News & Politics
1 Comment
1 Like
Statistics
Notes
No Downloads
Views
Total views
1,722
On SlideShare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
25
Comments
1
Likes
1
Embeds 0
No embeds

No notes for slide

Auditors' responsibilities on globalization!

  1. 1. Auditors Responsibilities on!Globalization Gholamhossein Davani Member of High council of Iranian association of Certified (Public Accountants (IACPA IMA,IIA,AAA,BAA,EAA,CAAA,AIA,CEF 1
  2. 2. Ladies & Gentelman. I am very glad to have the opportunity to speak at this conference, as it gives me the chance to stress the importance of the relationship between Globalization & auditors social responsibility 2
  3. 3. :GlobalizationIs an undeniably capitalist process. It hastaken off as a concept in the wake of thecollapse of the Soviet Union and ofsocialism as a viable alternate form ofeconomic organization. 3
  4. 4. Globalization in the era since World War II has beendriven by trade negotiation rounds, originally underthe auspices of GATT, which led to a series ofagreements to remove restrictions on "free trade".The Uruguay round led to a treaty to create the WorldTrade Organization or WTO, to mediate tradedisputes. Other bi- and trilateral trade agreements,including sections of Europes Maastricht Treaty andthe North American Free Trade Agreement have alsobeen signed in pursuit of the goal of reducing tariffsand barriers to trade “Source:Wikipedia” 4
  5. 5. What is GlobalizationGlobalization as a decoupling of spaceand time, emphasizing that withinstantaneous communications,knowledge and culture can be sharedaround the world simultaneously. “Sociologist, Anthony Giddiness” 5
  6. 6. Left critics of globalizationdefineThe word quite differently, presenting itas worldwide drive toward a globalizeeconomic system dominated bysupranational corporate trade andbanking institutions that are notaccountable to democratic processes ornational governments. 6
  7. 7. ?What is GlobalizationA sense that the world was united wasgenerated by the establishment of theInternational Date Line and world timezones, together with the near globaladoption of the Gregorian calendarbetween 1875 and 1925. During thatperiod, international standards werealso agreed for telegraphy andsignaling. 7
  8. 8. What is Globalization:Economically,socially, and ecologically negative";As an engine of "corporate imperialismone which tramples over the human rights,of developing societies, claims to bring prosperityyet often simply amounts to plunderingand profiteering. Negative effects include, cultural assimilation via cultural imperialism the export of artificial wants, and the destruction,or inhibition of authentic local and global community. ecology and cultures 8
  9. 9. BackgroundThe first great expansion of European capitalismtook place in the 16th century, following the firstcircumnavigation of the earth in 1519 to 1521.There was a big expansion in world trade andinvestment in the late nineteenth century. Thiswas brought to a halt by the First World War andthe bout of anti-free trade protectionism that ledto the Great Depression in 1930. Some see thisperiod as an interruption to the process ofglobalization commenced in the late 19thcentury. 9
  10. 10. How Globalization BirthThe end of the Second World War broughtanother great expansion of capitalism withthe development of multinational companiesinterested in producing and selling in thedomestic markets of nations around theworld. The emancipation of colonies createda new world order. Air travel and thedevelopment of international communicationsenhanced the progress of internationalbusiness. 10
  11. 11. New world DisciplineThe fall of the Berlin Wall and thecollapse of the Soviet Union ended thecold war between the forces ofcapitalism and socialism with capitalismtriumphant. The development of theinternet made possible the organizationof business on a global scale withgreater facility than ever before. 11
  12. 12. World CapitalismOne of the main sources of globalization is the viewamong activists that "international capitalism isnothing more than a byword for oppression,exploitation and injustice by rapacious multinationals.In their view, companies will stop at nothing tomaximize profits even if it means degrading theenvironment, abusing workers, exploiting third-worldmarkets and committing a host of other sins. “Socialresponsibility is defined as a framework ofmeasurable corporate policies and procedures andresulting behavior designed to benefit the workplaceand, by extension, the individual, the organization,and the community. 12
  13. 13. International businessMultinational companies face special issues in relation toethical auditing. It is, though, precisely these specialissues which can make ethical auditing so valuable tomultinationals. Executives of such companies are wellaware of the added complications which operating acrossa number of cultures brings. But problems tend to multiplywhen differing value bases are permitted to take holdwithin different cultures. It may have seemed acceptablefor Shell to apply differing environmental standards to theirdrilling in Ogoniland decades ago to those they applied inEurope or North America - but in an era of acute globalconsciousness of the interdependence of the worldeco-system the same standards are rightly expected inevery continent. 13
  14. 14. The elements of an effective global:financial reporting infrastructure include effective, independent and high quality accounting & auditing standard setters auditor’s social responsibility high quality auditing standards; audit firms with effective quality controls worldwide; profession-wide quality assurance; and active regulatory oversight. 14
  15. 15. Developments in InternationalFinancial Reporting In the last three years, there has been a tremendous change in the financial reporting infrastructure within the European Union, as evidenced by the many interesting and important developments that have occurred. Some of these changes in regulatory side are as :,• The European Commission (EC) issued a draft regulation that will require the use of IAS by 2005, or 2007, for 7,000 companies. That draft regulation was endorsed by the European Parliament less than 2 months ago;• The European Financial Reporting Advisory Group, or EFRAG, was established to coordinate the development of input to the IASB; and• Securities regulators in Europe have come together to agree on a more unified structure via the Committee of European Securities Regulators, otherwise known as CESR. 15
  16. 16. Social responsibility• Community• Diversity• Environment• Ethics• Financial Responsibility• Human Rights• Safety 16
  17. 17. Point of beginning Since the 1980s, government and business have been called on to espouse a range of responsibilities viewed as important to society. These include corporate responsibility to stakeholders, auditors’ responsibility to clients and the greater public, responsibility to future generations in the form of sustainable development, and the more generic social responsibility. Where calls for such commitments coalesce, we find social responsibility accounting or social accounting. This form of accounting is meant to measure and report the social costs incurred and benefits provided by companies above and beyond the costs and benefits captured in the traditional financial statements. 17
  18. 18. Social ResponsibilityThe currency and general relevance of socialresponsibility and sustainable development(SR/SD) to society is seen in such areas asinvestor interest in ethical mutual funds,government lists of threatened or endangeredspecies, and pollution control mandatesestablished by public policy setters. Indeed,business, government, and society arecaught up in a debate over how this planet’sscarce resources are to be preserved andused. 18
  19. 19. Social AccountingIn the years since the summit, someaction has been taken by accountingbodies to protect the environment or toreport on the social responsibility ofbusinesses and governments that arepolluting the environment 19
  20. 20. World Ethical AuditingWorld ethical auditing is a process whichmeasures the internal and externalconsistency of an organizations values base.The key points are that it is value-linked, andthat it incorporates a stakeholder approach.Its objectives are two-fold: It is intended forsocial accountability and transparencytowards stakeholders and it is intended forinternal control, to meet the ethical objectivesof the organization. 20
  21. 21. Ethical AuditThe ethical audit will result in the identification of (actual) organizational values on the one hand, and in a general direction as to how the company wants to develop its value system on the other. The findings will therefore need to be translated into action planning for the following year. If the ethical audit is performed every year or every other year, a company should be able to track its progress based upon the baseline information provided by the different elements of the ethical audit. 21
  22. 22. Professional activitiesThese efforts include reports issued by theFinancial Accounting Standards Board and theCanadian Institute of Chartered Accountantsoutlining how the present accounting systemtreats the potential future liabilities of enterprisesthat result from their current operations. Otherreports dealing with aspects of environmentalaccounting have been published by the Instituteof Chartered Accountants in England and Wales(ICAEW), the Organization for Economic Co-operation and Development (OECD), and theCanadian federal government. 22
  23. 23. SR /SDThe currency and general relevance ofsocial responsibility (SR) andsustainable development (SD) tosociety is seen in such areas asinvestor interest in ethical mutual funds,government lists of threatened orendangered species, and pollutioncontrol mandates established by publicpolicy setters. 23
  24. 24. What are SR/SDThese are voluntary initiatives with a global constituency that can also be defined as multi-sect oral, in that they can be applied in a wide range of industries. They have all evolved through social partnerships involving some elements of business, governments, labor organizations and non-government organizations. They all take a multi- stakeholder approach to corporate citizenship issues. 24
  25. 25. Elements of SR/SDEach initiative is described below and comparedwith the others. Many of the initiatives have acommon starting point: either convention of theInternational Labor Organization (ILO) and/or TheUN Declaration on the Rights of the Child and/or theUniversal Declaration on Human Rights. Most of the‘Global Eight’ reflect a northern perspective. This isbalanced only partially by the inclusion of ILOconventions, which are developed in a multilateralsetting. While there are standards developed in theSouth, they tend to be national and/or regional inapplication. 25
  26. 26. History of GlobalReportingThe Global Reporting Initiative (GRI) wasconceived in 1997 by the Boston-based Coalitionon Environmentally Responsible Economies(CERES) in collaboration with the Tells Institute.Over the past five years, the GRI has evolved intoa set of reporting criteria on all aspects of acompany’s performance. The initial draft standardwas ‘field-tested’ in 1999 by over 20 companiesand released in June 2000. A revision waspublished in 2002. 26
  27. 27. What is GRIThe GRI has been adopted by the UN Environment Programmed (with funding from the UN Development Fund) and is becoming an independent organization. The GRI is built on a simple premise. By providing a broadly-agreed mechanism, reached through negotiation between the partners in the process, to measure environmental and social performance, the GRI aims to assist investors, governments, companies and the wider public to understand more clearly the progress being made towards sustainability. The use of a common framework is seen as a way to improve related analysis and decision making. 27
  28. 28. The Global Eight1-The U N Global Compact2- ILO conventions3- The OECD Guidelines for Multinational Enterprises4- ISO 14000 Series5- Accountability 10006- The Global Reporting Initiative7- The Global Sullivan Principles8- Social Accountability 8000 28
  29. 29. Principles and standardsThe Global Eight may be divided into principles andstandards.Principles are a set of overarching values thatunderpin behavior, and so by their very nature are non-specific in behavioral terms.Standards are specific and advocate a set ofbenchmarks to be attained. There are several differenttypes: process, performance, certification, andfoundation: 29
  30. 30. Standards Stage Process Performance Foundation Certification 30
  31. 31. ProcessProcess standards define theprocedures a company should put inplace, such as how to conductstakeholder dialogue, how tocommunicate with stakeholders or todevelop management systems. 31
  32. 32. Process standards define the procedures a company should put in place,such as how to conduct stakeholder dialogue, how to communicate withstakeholders or to develop management systems.Performance standards define what a company should do or not do, suchas pay a living wage or prevent discrimination.Foundation standards seek to lay the foundation for a new field, describingwhat constitutes best practice in an emerging area.Certification standards establish a system under which certificates ofcompliance are awarded to companies that comply and have passed anindependent (third party) audit. 32
  33. 33. It is possible for standards to have:several of these characteristics • Principles (Global Compact and Global Sullivan Principles) • Standards (GRI, OECD Guidelines, SA8000, AA1000S, and ILO Conventions) • Foundation (ILO Conventions, AA1000S) • Process (SA8000, AA1000S, ISO 14000S) • Performance (SA8000, OECD Guidelines, and ILO Conventions) • Certification (SA8000 and ISO 14000 Series) 33
  34. 34. SA/CSRAfter Enron Clops some terminologies sameSocial audit (SA), corporate socialresponsibility (CSR) have been relief. Thesedays, corporate social responsibility (CSR) iscommon currency but a “currency” that israther devalued. The phrase is so over- andpoorly used that it begins to lose anymeaning. Any proper definition of CSR wouldrequire a categorical standard of values. Thisis lacking. In fact CSR now means manydifferent things to many people. 34
  35. 35. The financial scandals in a number ofmajor companies have led to demandsFor “accountability”. In fact, variouscorporations have used CSRFor damage limitation and in order toavoid regulation, often throughPublic relations operations aimed atrestoring their tarnished image. 35
  36. 36.  Freedom of association and the right to collective bargaining, enshrined In two of the fundamental Conventions of the ILO, are not mere options. They are international obligations. Indeed, the ILO Declaration on Fundamental Principles and Rights at Work, unanimously adopted in 1998, Makes clear that all ILO member States have an obligation, by the sole Virtue of their membership of the Organization, “to respect, to promote And to realize” workers’ fundamental rights, defined as: freedom of association And the effective recognition of the right to collective bargaining; The elimination of all forms of forced or compulsory labor. 36
  37. 37. Corporate Social Responsibility (CSR) encompasses anorganization’s commitment to behave in aneconomically and environmentally sustainable manner,while honoring the interests of direct stakeholdersThe mission of the socially responsible organization(SRO) is to influence the process of developing, andadvocating by example, socially responsible businesspractices which benefit not only the SRO and itsemployees, but also the greater community, theeconomy and the world environment. SROs seek toreshape the way business is done in both the for-profitand not-for-profit arena. 37
  38. 38. Detail of Social AuditingSocial Auditor will work on thecomponents of a companys SocialPolicy (Ethics, Labor, Environmental,Human Right, Community, Society,COMPLIANCE and etc.), and for eachsubject, the Social Auditor will analyzethe expectations of all stakeholders. 38
  39. 39. Ethicsvalues the company vows to respect. Policies include the pledgenot to participate in (nor engage in business with peopleinvolved in) a series of activities that are deemed offensive. Thislist of unacceptable activities often includes exploitation ofchildren, unethical treatment of animals, damage to theenvironment, and dealings with undemocratic regimes or with"bad guy" industries (fur, tobacco, guns, etc.).“The Ethics Policies will attract long-term investors, increasemarket shares for the ethical product, strengthen partnerships,”.and make the employees proud 39
  40. 40. Labour creation of a working environment allowing all employees to develop their potential. Policies include training, career planning, remunerations and advantages, rewards linked to merit, balance between work and family life, as well as mechanisms that ensure non-discrimination and non-harassment. “The Labor Policies will attract and keep a qualified workforce, and increase productivity, while opening new markets (ethnic minority customers are sensitive to the anti-discrimination policies in the work place).” 40
  41. 41. Environment monitoring and reduction of the damage caused to the environment. For instance, policies of reduction of emissions and waste. “The Environmental Policies will attract customers interested in the protection of the environment, and investors who fear the risks linked to bad environmental practices, while sometimes reducing the costs with cost-effective modifications of production processes. As for most other components of the Social Policy, serious Environmental Policies will attract Socially Responsible Funds and a qualified workforce (nobody likes polluters!).” 41
  42. 42. Human Rights making sure the company does not violate human rights nor appears as supporting human rights violators. “The Human Rights Policies, also, will attract Socially Responsible Funds and a qualified workforce. Its most important role, however, is defensive: to prevent boycotts or campaigns of protest that could seriously tarnish the reputation of the company accused of practicing (or being an accomplice of) human rights abuses, and the resulting falling stock prices, loss of market shares, and low-moral work force.” 42
  43. 43. Community investment in its local community. Policies include partnerships with voluntary local organizations, with financial donations, donations in kind (computers for education, food and clothes for the poor), and employees involvement. The company may initiate or participate to a major project such as the regeneration of a poor neighborhood plagued with unemployment, poverty, low education and racial tensions. “The Community Policies will not only create roots in a local base for the company, it will also increase the productivity of the work force involved in the projects (by developing their leadership and customer service skills, building pride and loyalty with the feeling of being useful).” 43
  44. 44. Society investment or partnership beyond the community. For instance, Cause Related Marketing (partnership with a charity to market a product while giving a small percentage of the sales to the charity). “The Society (or Extra-Community) Policies boost not only the products linked with the policy but also the image of the company. Cause Related Marketing is extremely appreciated by customers because it makes them feel good (allowing them to support charities without spending their time or money), as long as the charities are well chosen and the percentage is not too small (or the ceiling too low).” 44
  45. 45. ComplianceIdentification of all legal obligations and of the means to comply. Policies must deal with changing rules related to its work force (Labor), its products (Health, Environment, Intellectual property, specific regulations), its administration (Business, Tax), its dealings (supplier and customer liability, Criminal actions). The phenomenal growth of Socially Responsible Funds (now 20% of funds invested in the US), the growing difficulty to attract qualified employees, and the rise of non-governmental organizations able to sue or boycott unethical businesses, demonstrate the vital importance for any business of a well designed Social Policy. “The Compliance Policies are part of the Social Policy for two reasons. First, by complying with the law, the company demonstrates it is socially responsible. More importantly, Compliances Policies often go beyond the legal requirements, in order to show concerns for social matters (health, labor, environment, etc.).” 45
  46. 46. The ILO has defined core labour standards:which includeFreedom of association (Convention 87)Right to collective bargaining (Convention 98)Prohibition on forced labour (Convention 29 and 105)Prohibition on child labourFreedom from discrimination (Convention 111) 46
  47. 47. Social Responsibility In the globalization area auditors responsibilities have changed to corporate social responsibility that main basic is related to Ethics. Although many auditors are burning the midnight oil to familiarize themselves with the new regulations and to prepare for their role in the compliance process, the scope and complexity of change has made the learning process a significant challenge. 47
  48. 48. The company must be totally involved in the Audit. The IndependentSocial Audit is neither an inspection (for which the company woulddissimulate important pieces) nor is it a situation where the Auditorbrings his "one size fits all" solutions. The Auditor is only the coachof a team, composed of senior executives of the company who areworking at gathering the information and finding solutions. TheAuditor provides the directions, merges the information to create awhole picture of the social situation, and gives advice on themethod used by the company to build its Social Policy and on itsdifferent aspects. Ultimately, it is the leadership of a company whobuilds its Social Policy, and then decides on the best way to run thepolicy (for instance, nomination of a person or creation of adepartment dedicated to Social Policy issues). 48
  49. 49. Who is independent Social AuditorThe first step is to have an IndependentSocial Audit, either Defensive (to preventlawsuits and boycotts), or Productive (toincrease productivity, market shares and longterm investment). The audit will identify thestakeholders; clarify the components of aSocial Policy that would address the concernsof these stakeholders at either the Defensiveor Productive level, or makerecommendations on the necessarymeasures to build the Social Policy. 49
  50. 50. The conceptualframeworkIn contrast to social auditing which aims primarily atmeasuring the social impact of a company on itsenvironment, the ethical audit from the outset isvalue-linked. It measures the "ethical climate" of acompany by analyzing the values on which theorganizational actions are based and by testing themoral quality of these actions against values thatshould be taken into consideration.the ethical audit is organisation-centred, meaning thatorganizational values are to be found within thecompany at all levels in stead of being inculcatedfrom outside or by senior management alone. 50
  51. 51. AccountabilityThe objective of accountability towardsstakeholders requires information aboutgeneral issues such as product safety, theenvironment, employee relations, etc. Anethical bookkeeping system collects datasystematically about the organizations ethicalbehavior, which is relevant for stakeholders.This process is most likely to include "hard"information, including for instance complaintsof stakeholders, business accidents or finesfor unethical behavior 51
  52. 52. Corporate Governance The good corporate governance needs to address not only boards of directors, committees, and legal and regulatory issues, but also business practices and ethics, disclosures and transparency, enterprise risk management, monitoring, and communication. That its a whole set of systems and processes.“Its not just narrowly focused on compliance with Sarbanes-Oxley.” 52
  53. 53. Sustainable CompanyThe systems and processes of corporate governancealso should consider a diverse group ofstakeholders, not solely shareholders. "Mostcorporate governance focuses just on shareholders.But a shareholders interest is different than anemployees interest, which is different than theinterest of a community, creditor, or supplier. And toooften, the focus of shareholders, management, andeveryone else in the company is on increasing. shareholder valueFurthermore, this responsibility is often on the backs ofthe community or the employees or the suppliers,.and that is not in their interest 53
  54. 54. Creation of a SocialPolicy Most companies (if not all) already haveelements of Social Policy. Often, these areindependent pieces of regulation andpractices. Most of the time, they are not partof a unique strategy, they are not managedby powerful senior executives, they are notreviewed before any business decisions aremade, and they are not used in ways thatwould produce their full benefits. 54
  55. 55. Conclusion“Auditor’s social responsibility” & “ethical audit “ will have particular benefits for multinational companies, but it could also be of great value in take-over and merger situations, especially ones which involve partners from different countries where there may be conflicting value systems. Other benefits include enhanced corporate reputation, making the company fraud resistant, and improving staff morale and motivation. 55
  56. 56. Sources1- Social responsibility, Peter Easley, Esq, world bank group.2- Stockholder Engagement standard, Institute of Social and Ethical accountability.3- GRI and the transparency imperative, why GRI, global reporting initiative.4- Living corporate citizenship by persons education Ltd.http://www.business-minds.com/zone.asp?item=0125- Corporate social responsibility & the global sullivan principle.6- How ethical auditing can help companies complete more effectively at an international level. European Institute for business ethics, intimates universe.7- Ethics after Enron: PPT. Where are we, and where are we going, University of San Diego 2003. 56
  57. 57. Dr. Gholamhossein DavaniB.SC. Cost AccountingEM.B.A, PHD Business AdministrationIACPA, IICA, IMA, AAA, BAA, EAA, IIA,AFA,CAAA,CFEDr. Gholamhossein Davani, BA, MBA and PHD in Business administration, is member of High Council of Iranian Association of Certified Public Accountants. (AICPA) and a member of the Iranian Institute of Certified Public Accountants (IICA) and the IMA,AAA,BAA,EAA,IIA,AFA ,CFE and CAAA. Davani is manager of Tax & Management services of “Dayarayan auditing & Financial Services Firm”. He was formerly a managing director of Petrochemical Auditing & Management Services Firm (Hessam). Davani has published more than 13 books in a variety of accounting and finance, including the Tax accounting, tax act, commerce act, Social insurance Labor Law, Foreign investment Law & regulation, corporate accounting and Stock Exchange and share assessment. He had been editor of “Accountancy magazine” in Iran for four years. 57

×