FINANCE REPORT

The Impact of Corporate Governance Mechanisms on the Quality of Financial Reporting

Paper Outline1

Introduction2

Discussion and Integration4

Corporate Governance and Financial Disclosure in the Light of Financial Reporting Council's Reports4

Corporate Governance and Financial Disclosure in Banks and Other Financial Institutions of United Kingdom (BOFIs)5

Corporate Governance and Financial Reporting Quality Goes Hand-In-Hand7

Corporate Governance and Financial Disclosure Quality and Extent9

Corporate Governance and Voluntary Financial Disclosure12

Ownership Structure12

Board Independence13

CEO Duality14

Corporate Governance and Board of Director's Responsibility for Strategic Financial Disclosure15

Corporate Governance Rating and Financial Disclosure Quality19

Corporate Governance and Restatement of Financial Reporting21

Conclusion21

References25

Appendix31

The Impact of Corporate Governance Mechanisms on the Quality of Financial Reporting

Paper Outline

The report on 'The Impact of Corporate Governance Mechanisms on the Quality of Financial Reporting' comprehensively discusses the impact of corporate governance mechanisms on financial reporting quality. In order to study this relation, first this paper provides a view of corporate governance codes and recommendations provided by the Financial Reporting Council, in order to provide the reader a conceptual view of corporate governance codes that governs the aspects of financial disclosures of organizations. Afterwards, brief review of the corporate governance mechanisms and financial disclosures with respect to banks and other financial institutions of United Kingdom is highlighted. After having a conceptual view of corporate governance codes taht govern the financial reporting of organizations and having understanding of it in view of BOFIs of UK, various other articles are then discussed to fully explain this relationship between financial reporting quality and corporate governance mechanisms with every aspect. The information is gathered from journal articles and provided in detail under different heads, where, starting with the overview of corporate governance and financial reporting quality goes hand-in-hand. The head corporate governance and financial disclosure extent and quality discuss the effect of corporate governance practices on the extent and quality of financial disclosure. Similarly, other heads also illustrates the study of corporate governance and financial reporting aspect like effect of corporate governance rating on financial disclosure, or board of director's responsibility for strategic governance, corporate governance mechanisms impact on voluntary disclosure, and financial restatements and corporate governance. Thus, several aspect of this study are highlighted in this paper for clearly demonstrating the relationship between corporate governance mechanisms and financial reporting quality.

Introduction

The topic that I have chosen for this report is “The impact of corporate governance mechanisms on the quality of financial reporting.” This study holds an immense importance in the field of finance because financial reporting is one of the most crucial aspects for any company as it highlights the financial position of companies upon which depends their success. In order to rightly report the financial position of a company, good corporate governance is essential. The corporate governance are the oversight actions undertaken by the audit committees and board of directors in order to make sure the financial disclosure process holds integrity. Acoording to the Organization for Economic Cooperation and Development (OECD), corporate governance is a set of relatiohs between the management of a company, its stakeholders, its shareholders, and its board of ...