ADVANCED FINANCIAL
REPORTING AND ANALYSIS
CPA ERICK MOMANYI 0729224223
, ADVANCED FINANCIAL REPORTING AND ANALYSIS NOTES
CORPORATE GOVERNANCE
Corporate governance is the system by which companies are directed and controlled. Board of directors
is responsible for the governance of their companies while the shareholders role is to appoint the
directors and the auditors and to satisfy themselves that an appropriate governance structure is in
place.
Corporate governance in the corporate sector is primarily concerned with:
1. The procedure adopted by the board and its committees to discharge its duties (e.g., membership of
the board, frequency of and procedure at, board meetings)
2. The boards’ accountability to shareholders and other stakeholders.
3. The manner in which the board controls the company or group.
Corporate governance report.
Boards of directors is charged with the responsibility of ensuring the company is managed in a sound
manner that delivers shareholders value within an environment of good corporate governance. The
board is responsible for reviewing and approving the business strategic objectives and providing the
necessary leadership and oversight to the management.
Contents of corporate governance report.
1. Board organization and structure-duties and responsibility of the board.
2. Activities of the board.
3. Division of responsibility- a clear separation of roles should be established between the chairman and
the CEO.
4. Remuneration of the directors.
5. Board composition and independence
6. Board members meeting and member’s attendance.
7. Board committees
8. Audit committee
9. Nomination and remuneration committee.
10. Special committees and ethics committee.
11. Company secretary-the role and responsibility.
12. Board of directors’ shareholdings.
CPA ERICK MOMANYI 0729224223 pg. 1
,DIRECTORS REPORT
The report must show the following contents:
1. The state of the company’s affairs
2. The principal activities of the company or group of companies.
3. The net profit for the year.
4. The amount, if any they recommend to be paid as dividend. 5. The amount, if any that is to be carried
as reserves.
6. A fair review of the business during the year.
7. The names of directors who have held office at any time of the year.
8. Directors interest in the shares and debentures of the company.
9. The company’s auditor.
ENVIRONMENTAL REPORTING.
This is the disclosure of information in the published annual report or elsewhere of the effect that the
operations of the business have on the natural environment.
Environmental reporting in practice.
There are two main vehicles that entities use to publish information about the ways in which they
interact with the natural environment.
The published annual report 9 which include the financial statements).
A separate environment report.
The IASB encourages the presentation of environmental reports if management believes that they will
assist users making economic decision. Separate environmental reports.
Many large companies publish environmental report that re completely separate from the annual
report and financial statements. The environmental report is often combined in a sustainable report.
Most environmental reports take the form of a combined statement of policy and review of activity.
They cover issues such as:
The waste management.
Pollution.
Intrusion into the land scape.
The effect of an entity’s activity upon wildlife.
Use of energy.
CPA ERICK MOMANYI 0729224223 pg. 2
, Contents of environment report.
The content of an environment report may cover the following areas:
1. Environment issues pertinent to the entity and industry.
The entity’s policy towards the environment and any improvement made.
Whether the entity has a formal system for managing environmental risks.
The identity of the directors responsible for environmental issues.
The entity perception of the risks to the environment from its operations.
The extent to which the entity would be capable of responding to a major environmental disaster.
Details of any significant infringement of environmental legislation on environmental matters.
Details of key indicators (if any) used by the entity to measure environmental performance.
2. Financial information.
The entity accounting policies relating to environmental costs provisions and contingencies.
The amount charged to the income statement during the accounting period in respect of expenditure
to prevent or rectify damage to the environment caused by the entities operations.
Details (including amount) of any provisions or contingent liabilities relating to environmental
matters.
The amount of environmental expenditure capitalized during the year.
Details of fines, penalties and compensation paid during the accounting period in respect of non-
compliance with environmental regulations.
Accounting for environment costs.
Environment costs-include environmental measures and environmental losses.
Environmental measures-are the costs of preventing, reducing or repairing damage to the
environment and the costs of conserving resources.
Environmental losses-are costs that bring no benefit to the business.
Environmental measures cost can include:
Capital expenditure.
Closure or decommissioning costs.
Clean-up cost
Development expenditure.
Recycling costs/conserving energy.
CPA ERICK MOMANYI 0729224223 pg. 3
REPORTING AND ANALYSIS
CPA ERICK MOMANYI 0729224223
, ADVANCED FINANCIAL REPORTING AND ANALYSIS NOTES
CORPORATE GOVERNANCE
Corporate governance is the system by which companies are directed and controlled. Board of directors
is responsible for the governance of their companies while the shareholders role is to appoint the
directors and the auditors and to satisfy themselves that an appropriate governance structure is in
place.
Corporate governance in the corporate sector is primarily concerned with:
1. The procedure adopted by the board and its committees to discharge its duties (e.g., membership of
the board, frequency of and procedure at, board meetings)
2. The boards’ accountability to shareholders and other stakeholders.
3. The manner in which the board controls the company or group.
Corporate governance report.
Boards of directors is charged with the responsibility of ensuring the company is managed in a sound
manner that delivers shareholders value within an environment of good corporate governance. The
board is responsible for reviewing and approving the business strategic objectives and providing the
necessary leadership and oversight to the management.
Contents of corporate governance report.
1. Board organization and structure-duties and responsibility of the board.
2. Activities of the board.
3. Division of responsibility- a clear separation of roles should be established between the chairman and
the CEO.
4. Remuneration of the directors.
5. Board composition and independence
6. Board members meeting and member’s attendance.
7. Board committees
8. Audit committee
9. Nomination and remuneration committee.
10. Special committees and ethics committee.
11. Company secretary-the role and responsibility.
12. Board of directors’ shareholdings.
CPA ERICK MOMANYI 0729224223 pg. 1
,DIRECTORS REPORT
The report must show the following contents:
1. The state of the company’s affairs
2. The principal activities of the company or group of companies.
3. The net profit for the year.
4. The amount, if any they recommend to be paid as dividend. 5. The amount, if any that is to be carried
as reserves.
6. A fair review of the business during the year.
7. The names of directors who have held office at any time of the year.
8. Directors interest in the shares and debentures of the company.
9. The company’s auditor.
ENVIRONMENTAL REPORTING.
This is the disclosure of information in the published annual report or elsewhere of the effect that the
operations of the business have on the natural environment.
Environmental reporting in practice.
There are two main vehicles that entities use to publish information about the ways in which they
interact with the natural environment.
The published annual report 9 which include the financial statements).
A separate environment report.
The IASB encourages the presentation of environmental reports if management believes that they will
assist users making economic decision. Separate environmental reports.
Many large companies publish environmental report that re completely separate from the annual
report and financial statements. The environmental report is often combined in a sustainable report.
Most environmental reports take the form of a combined statement of policy and review of activity.
They cover issues such as:
The waste management.
Pollution.
Intrusion into the land scape.
The effect of an entity’s activity upon wildlife.
Use of energy.
CPA ERICK MOMANYI 0729224223 pg. 2
, Contents of environment report.
The content of an environment report may cover the following areas:
1. Environment issues pertinent to the entity and industry.
The entity’s policy towards the environment and any improvement made.
Whether the entity has a formal system for managing environmental risks.
The identity of the directors responsible for environmental issues.
The entity perception of the risks to the environment from its operations.
The extent to which the entity would be capable of responding to a major environmental disaster.
Details of any significant infringement of environmental legislation on environmental matters.
Details of key indicators (if any) used by the entity to measure environmental performance.
2. Financial information.
The entity accounting policies relating to environmental costs provisions and contingencies.
The amount charged to the income statement during the accounting period in respect of expenditure
to prevent or rectify damage to the environment caused by the entities operations.
Details (including amount) of any provisions or contingent liabilities relating to environmental
matters.
The amount of environmental expenditure capitalized during the year.
Details of fines, penalties and compensation paid during the accounting period in respect of non-
compliance with environmental regulations.
Accounting for environment costs.
Environment costs-include environmental measures and environmental losses.
Environmental measures-are the costs of preventing, reducing or repairing damage to the
environment and the costs of conserving resources.
Environmental losses-are costs that bring no benefit to the business.
Environmental measures cost can include:
Capital expenditure.
Closure or decommissioning costs.
Clean-up cost
Development expenditure.
Recycling costs/conserving energy.
CPA ERICK MOMANYI 0729224223 pg. 3
