Corporate Governance Lab Report Example | Topics and Well Written Essays - 3250 words

Corporate Governance - Lab Report Example Capital flow seems directed towards the companies, which practice fair and transparent ways of governing their organisations. With the changing global business scenario the need of understanding and effective practise of fair and technologically advance corporate governance has also increased. ICAEW (2002) has explained corporate governance in a very effective and comprehensive manner as " Corporate governance is commonly referred to as a system by which organisations are directed and controlled. It is the process by which company objectives are established, achieved and monitored. Corporate governance is concerned with the relationships and responsibilities between the board, management, shareholders and other relevant stakeholders within a legal and regulatory framework." The discussion about corporate governance in Enron is based on the hypothesis that it was not the failure of governance mechanisms, which lead, to the collapse of Enron but the perversion of the governance model, which caused the disaster. Essentially, the basic issue was not fraud detection by the auditors but the alleged act of in concealment which done the damage. Nevertheless, there is still no conclusive empirical evidence in the literature about whether and how governance mechanisms influence the performance and the value of the firms; and, about how governance mechanisms interact (in a complementary or substitute way) (Bohern and Odegaard, 2003). Discussion: There has historically been a considerable difference between U.S. and U.K. owned corporations in their management and organisation. U.S. corporations have typically been more centralised, more professionally managed and [have had] more formalised bureaucracy. They have generally been seen as more aggressive and results-oriented. U.K. corporations placed more emphasis on relationships rather than formal controls, and appeared "amateurish" compared to their U.S. counterparts. Recent years have seen a considerable convergence of U.K. management styles with those of the U.S. Many of the largest British multinationals, such as GlaxoSmithKline and BP, have merged with or acquired large U.S. firms, and almost all leading U.K. companies derive substantial proportions of their revenues from the U.S. The differences in management style and culture have become far more nuance. Large British multinationals probably remain more international and cosmopolitan in their outlooks than their U.S. counterparts, slower to act and less inclined to adopt the latest management fads, and less ruthless in dealing with failure and under-performance. However, there is vast industry and firm differences. Both UK and US GAAP require purchase consideration relating to a business combination to be allocated to the net assets acquired at their fair value on the date of acquisition. Intangible assets: Under UK GAAP fair values are assigned to identifiable intangible assets only if the identifiable intangibles are capable of being disposed of or settled separately, without disposing of a business of the entity. Under US GAAP, identifiable assets