Edited, memorised or added to reading list

on 02-Feb-2018 (Fri)

Do you want BuboFlash to help you learning these things? Click here to log in or create user.

Flashcard 1479774965004

Tags
#cfa-level-1 #reading-25-understanding-income-statement
Question

IFRS specify that revenue from the sale of goods is to be recognized when the following conditions are satisfied:

  • it is probable that the economic benefits associated with the transaction [...]

Answer
will flow to the entity


statusnot learnedmeasured difficulty37% [default]last interval [days]               
repetition number in this series0memorised on               scheduled repetition               
scheduled repetition interval               last repetition or drill

Parent (intermediate) annotation

Open it
inuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold; the amount of revenue can be measured reliably; it is probable that the economic benefits <span>associated with the transaction will flow to the entity; and the costs incurred or to be incurred in respect of the transaction can be measured reliably. <span><body><html>

Original toplevel document

3. REVENUE RECOGNITION
lace and measures revenue at the amount of cash received. In practice, however, determining when revenue should be recognized and at what amount is considerably more complex for reasons discussed in the following sections. <span>3.1. General Principles An important aspect concerning revenue recognition is that it can occur independently of cash movements. For example, assume a company sells goods to a buyer on credit, so does not actually receive cash until some later time. A fundamental principle of accrual accounting is that revenue is recognized (reported on the income statement) when it is earned, so the company’s financial records reflect revenue from the sale when the risk and reward of ownership is transferred; this is often when the company delivers the goods or services. If the delivery was on credit, a related asset, such as trade or accounts receivable, is created. Later, when cash changes hands, the company’s financial records simply reflect that cash has been received to settle an account receivable. Similarly, there are situations when a company receives cash in advance and actually delivers the product or service later, perhaps over a period of time. In this case, the company would record a liability for unearned revenue when the cash is initially received, and revenue would be recognized as being earned over time as products and services are delivered. An example would be a subscription payment received for a publication that is to be delivered periodically over time. When to recognize revenue (when to report revenue on the income statement) is a critical issue in accounting. IFRS specify that revenue from the sale of goods is to be recognized (reported on the income statement) when the following conditions are satisfied:11 the entity has transferred to the buyer the significant risks and rewards of ownership of the goods; the entity retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold; the amount of revenue can be measured reliably; it is probable that the economic benefits associated with the transaction will flow to the entity; and the costs incurred or to be incurred in respect of the transaction can be measured reliably. In simple words, this basically says revenue is recognized when the seller no longer bears risks with respect to the goods (for example, if the goods were destroyed by fire, it would be a loss to the purchaser), the seller cannot tell the purchaser what to do with the goods, the seller knows what it expects to collect and is reasonably certain of collection, and the seller knows how much the goods cost. IFRS note that the transfer of the risks and rewards of ownership normally occurs when goods are delivered to the buyer or when legal title to goods transfers. However, as noted by the above remaining conditions, physical transfer of goods will not always result in the recognition of revenue. For example, if goods are delivered to a retail store to be sold on consignment and title is not transferred, the revenue would not yet be recognized.12 IFRS specify similar criteria for recognizing revenue for the rendering of services.13 When the outcome of a transaction involving the rendering of services can be estimated reliably, revenue associated with the transaction shall be recognized by reference to the stage of completion of the transaction at the balance sheet date. The outcome of a transaction can be estimated reliably when all the following conditions are satisfied: the amount of revenue can be measured reliably; it is probable that the economic benefits associated with the transaction will flow to the entity; the stage of completion of the transaction at the balance sheet date can be measured reliably; and the costs incurred for the transaction and the costs to complete the transaction can be measured reliably. IFRS criteria for recognizing interest, royalties, and dividends are that it is probable that the economic benefits associated with the transaction will flow to the entity and the amount of the revenue can be reliably measured. US GAAP14 specify that revenue should be recognized when it is “realized or realizable and earned.” The US Securities and Exchange Commission (SEC),15 motivated in part because of the frequency with which overstating revenue occurs in connection with fraud and/or misstatements, provides guidance on how to apply the accounting principles. This guidance lists four criteria to determine when revenue is realized or realizable and earned: There is evidence of an arrangement between buyer and seller. For instance, this would disallow the practice of recognizing revenue in a period by delivering the product just before the end of an accounting period and then completing a sales contract after the period end. The product has been delivered, or the service has been rendered. For instance, this would preclude revenue recognition when the product has been shipped but the risks and rewards of ownership have not actually passed to the buyer. The price is determined, or determinable. For instance, this would preclude a company from recognizing revenue that is based on some contingency. The seller is reasonably sure of collecting money. For instance, this would preclude a company from recognizing revenue when the customer is unlikely to pay. Companies must disclose their revenue recognition policies in the notes to their financial statements (sometimes referred to as footnotes). Analysts should review these policies carefully to understand how and when a company recognizes revenue, which may differ depending on the types of product sold and services rendered. Exhibit 4 presents a portion of the summary of significant accounting policies note that discusses revenue recognition for DaimlerChrysler (DB-F: DAI) from its 2009 annual report, prepared under IFRS. <span><body><html>







Flashcard 1611237297420

Tags
#reading-26-understanding-balance-sheets
Question
There are [...] potential components that comprise the owner's equity section of the balance sheet
Answer
5


statusnot learnedmeasured difficulty37% [default]last interval [days]               
repetition number in this series0memorised on               scheduled repetition               
scheduled repetition interval               last repetition or drill
Equity
Equity is a residual value of assets which the owner has claim to after satisfying other claims on the assets (liabilities). There are five potential components that comprise the owner's equity section of the balance sheet: Contributed capital. The amount of money which has been invested in the business by the owners. This includes preferred stocks and common stocks. Common stock is recorded a







Flashcard 1620815514892

Tags
#cfa-level-1 #reading-23-financial-reporting-mechanics
Question
To which Financial Statement Element does the account belong?

Intangible assets (patents, trademarks, licenses, copyright, goodwill)
Answer
Assets


statusnot learnedmeasured difficulty37% [default]last interval [days]               
repetition number in this series0memorised on               scheduled repetition               
scheduled repetition interval               last repetition or drill

Parent (intermediate) annotation

Open it
Exhibit 2. Common Accounts Assets Cash and cash equivalents Accounts receivable, trade receivables Prepaid expenses Inventory Property, plant, and equipment Investment propert

Original toplevel document

3.1. Financial Statement Elements and Accounts
ounting periods), and sales returns and allowances (an offset to revenue reflecting any cash refunds, credits on account, and discounts from sales prices given to customers who purchased defective or unsatisfactory items). <span>Exhibit 2. Common Accounts Assets Cash and cash equivalents Accounts receivable, trade receivables Prepaid expenses Inventory Property, plant, and equipment Investment property Intangible assets (patents, trademarks, licenses, copyright, goodwill) Financial assets, trading securities, investment securities Investments accounted for by the equity method Current and deferred tax assets [for banks, Loans (receivable)] Liabilities Accounts payable, trade payables Provisions or accrued liabilities Financial liabilities Current and deferred tax liabilities Reserves Unearned revenue Debt payable Bonds (payable) [for banks, Deposits] Owners’ Equity Capital, such as common stock par value Additional paid-in capital Retained earnings Other comprehensive income Minority interest Revenue Revenue, sales Gains Investment income (e.g., interest and dividends) Expense Cost of goods sold Selling, general, and administrative expenses “SG&A” (e.g., rent, utilities, salaries, advertising) Depreciation and amortization Interest expense Tax expense Losses For presentation purposes, assets are sometimes categorized as “current” or “non-current.” For example, Tesco (a large European retailer) prese







Flashcard 1637227302156

Tags
#reading-9-probability-concepts
Question
The conditional probability of an event may be [...] than the unconditional probability, depending on the facts.
Answer
greater than, equal to, or less


statusnot learnedmeasured difficulty37% [default]last interval [days]               
repetition number in this series0memorised on               scheduled repetition               
scheduled repetition interval               last repetition or drill






Almost all operating systems have a user interface (UI). This interface can take several forms. One is a command-line interface ( CLI), which uses text commands and a method for entering them (say, a keyboard for typing in commands in a specific format with specific options). Another is a batch interface, in which commands and directives to control those commands are entered into files, and those files are executed. Most commonly, a graphical user interface ( GUI) is used. Here, the interface is a window system with a pointing device to direct I/O, choose from menus, and make selections and a keyboard to enter text. Some systems provide two or all three of these variations

statusnot read reprioritisations
last reprioritisation on reading queue position [%]
started reading on finished reading on

pdf

cannot see any pdfs




The main function of the command interpreter is to get and execute the next user-specified command.

statusnot read reprioritisations
last reprioritisation on reading queue position [%]
started reading on finished reading on

pdf

cannot see any pdfs




These commands can be implemented in two general ways. In one approach, the command interpreter itself contains the code to execute the command. For example, a command to delete a file may cause the command interpreter to jump to a section of its code that sets up the parameters and makes the appropriate system call. In this case, the number of commands that can be given determines the size of the command interpreter, since each command requires its own implementing code. An alternative approach—used by UNIX, among other operating systems —implements most commands through system programs. In this case, the command interpreter does not understand the command in any way; it merely uses the command to identify a file to be loaded into memory and executed. Thus, the UNIX command to delete a file rm file.txt would search for a file called rm, load the file into memory, and execute it with the parameter file.txt

statusnot read reprioritisations
last reprioritisation on reading queue position [%]
started reading on finished reading on

pdf

cannot see any pdfs




System calls provide an interface to the services made available by an operating system. These calls are generally available as routines written in C and C++, although certain low-level tasks (for example, tasks where hardware must be accessed directly) may have to be written using assembly-language instructions.

statusnot read reprioritisations
last reprioritisation on reading queue position [%]
started reading on finished reading on

pdf

cannot see any pdfs




As you can see, even simple programs may make heavy use of the operating system. Frequently, systems execute thousands of system calls per second. Most programmers never see this level of detail, however. Typically, application developers design programs according to an application programming interface ( API).TheAPI specifies a set of functions that are available to an application programmer, including the parameters that are passed to each function and the return values the programmer can expect. Three of the most common APIs available to application programmers are the Windows API for Windows systems, the POSIX API for POSIX-based systems (which include virtually all versions of UNIX,Linux,andMacOS X), and the Java API for programs that run on the Java virtual machine. A programmer accesses an API via a library of code provided by the operating system. In the case of UNIX and Linux for programs written in the C language, the library is called libc. Note that—unless specified—the system-call names used throughout this text are generic examples. Each operating system has its own name for each system call.

statusnot read reprioritisations
last reprioritisation on reading queue position [%]
started reading on finished reading on

pdf

cannot see any pdfs




Why would an application programmer prefer programming according to an API rather than invoking actual system calls? There are several reasons for
doing so. One benefit concerns program portability. An application programmer designing a program using an API can expect her program to compile and run on any system that supports the same API (although, in reality, architectural differences often make this more difficult than it may appear). Furthermore, actual system calls can often be more detailed and difficult to work with than the API available to an application programmer. Nevertheless, there often exists a strong correlation between a function in the API and its associated system call within the kernel. In fact, many of the POSIX and Windows APIs are similar to the native system calls provided by the UNIX, Linux, and Windows operating systems

statusnot read reprioritisations
last reprioritisation on reading queue position [%]
started reading on finished reading on

pdf

cannot see any pdfs




For most programming languages, the run-time support system (a set of functions built into libraries included with a compiler) provides a system- call interface that serves as the link to system calls made available by the operating system. The system-call interface intercepts function calls in the API and invokes the necessary system calls within the operating system. Typically, a number is associated with each system call, and the system-call interface maintains a table indexed according to these numbers

statusnot read reprioritisations
last reprioritisation on reading queue position [%]
started reading on finished reading on

pdf

cannot see any pdfs




most of the details of the operating-system interface are hidden from the programmer by the API and are managed by the run-time support library

statusnot read reprioritisations
last reprioritisation on reading queue position [%]
started reading on finished reading on

pdf

cannot see any pdfs




System calls occur in different ways, depending on the computer in use. Often, more information is required than simply the identity of the desired system call. The exact type and amount of information vary according to the particular operating system and call. For example, to get input, we may need to specify the file or device to use as the source, as well as the address and length of the memory buffer into which the input should be read. Of course, the device or file and length may be implicit in the call.

statusnot read reprioritisations
last reprioritisation on reading queue position [%]
started reading on finished reading on

pdf

cannot see any pdfs




Three general methods are used to pass parameters to the operating system. The simplest approach is to pass the parameters in registers. In some cases, however, there may be more parameters than registers. In these cases, the parameters are generally stored in a block, or table, in memory, and the address of the block is passed as a parameter in a register (Figure 2.7). This is the approach taken by Linux and Solaris. Parameters also can be placed, or pushed, onto the stack by the program and popped offthestackbythe operating system. Some operating systems prefer the block or stack method because those approaches do not limit the number or length of parameters being passed

statusnot read reprioritisations
last reprioritisation on reading queue position [%]
started reading on finished reading on

pdf

cannot see any pdfs




System calls can be grouped roughly into six major categories: process control, file manipulation, device manipulation, information maintenance, communications,andprotection.

statusnot read reprioritisations
last reprioritisation on reading queue position [%]
started reading on finished reading on

pdf

cannot see any pdfs




Quite often, two or more processes may share data. To ensure the integrity of the data being shared, operating systems often provide system calls allowing aprocesstolock shared data. Then, no other process can access the data until the lock is released. Typically, such system calls include acquire lock() and release lock()

statusnot read reprioritisations
last reprioritisation on reading queue position [%]
started reading on finished reading on

pdf

cannot see any pdfs




The MS-DOS operating system is an example of a single-tasking system. It has a command interpreter that is invoked when the computer is started (Figure 2.9(a)). Because MS-DOS is single-tasking, it uses a simple method to run a program and does not create a new process. It loads the program into memory, writing over most of itself to give the program as much memory as possible (Figure 2.9(b)). Next, it sets the instruction pointer to the first instruction of the program. The program then runs, and either an error causes a trap, or the program executes a system call to terminate. In either case, the error code is saved in the system memory for later use. Following this action, the small portion of the command interpreter that was not overwritten resumes execution. Its first task is to reload the rest of the command interpreter from disk. Then the command interpreter makes the previous error code available to the user or to the next program

statusnot read reprioritisations
last reprioritisation on reading queue position [%]
started reading on finished reading on

pdf

cannot see any pdfs




We first need to be able to create() and delete() files. Either system call requires the name of the file and perhaps some of the file’s attributes. Once the file is created, we need to open() it and to use it. We may also read(), write(),orreposition() (rewind or skip to the end of the file, for example). Finally, we need to close() the file, indicating that we are no longer using it

statusnot read reprioritisations
last reprioritisation on reading queue position [%]
started reading on finished reading on

pdf

cannot see any pdfs




The various resources controlled by the operating system can be thought of as devices. Some of these devices are physical devices (for example, disk drives), while others can be thought of as abstract or virtual devices (for example, files). A system with multiple users may require us to first request() a device, to ensure exclusive use of it. After we are finished with the device, we release() it. These functions are similar to the open() and close() system calls for files

statusnot read reprioritisations
last reprioritisation on reading queue position [%]
started reading on finished reading on

pdf

cannot see any pdfs




Many system calls exist simply for the purpose of transferring information between the user program and the operating system. For example, most systems have a system call to return the current time() and date().Other system calls may return information about the system, such as the number of current users, the version number of the operating system, the amount of free memory or disk space, and so on

statusnot read reprioritisations
last reprioritisation on reading queue position [%]
started reading on finished reading on

pdf

cannot see any pdfs




Many operating systems provide a time profile of a program to indicate the amount of time that the program executes at a particular location or set of locations. A time profile requires either a tracing facility or regular timer interrupts. At every occurrence of the timer interrupt, the value of the program counter is recorded. With sufficiently frequent timer interrupts, a statistical picture of the time spent on various parts of the program can be obtained. In addition, the operating system keeps information about all its processes, and system calls are used to access this information

statusnot read reprioritisations
last reprioritisation on reading queue position [%]
started reading on finished reading on

pdf

cannot see any pdfs




There are two common models of interprocess communication: the message- passing model and the shared-memory model. In the message-passing model, the communicating processes exchange messages with one another to transfer information. Messages can be exchanged between the processes either directly or indirectly through a common mailbox. Before communication can take place, a connection must be opened. The name of the other communicator must be known, be it another process on the same system or a process on another computer connected by a communications network. Each computer in a network has a host name by which it is commonly known.

statusnot read reprioritisations
last reprioritisation on reading queue position [%]
started reading on finished reading on

pdf

cannot see any pdfs




In the shared-memory model, processes use shared memory create() and shared memory attach() system calls to create and gain access to regions of memory owned by other processes. Recall that, normally, the operating system tries to prevent one process from accessing another process’s memory. Shared memory requires that two or more processes agree to remove this restriction. They can then exchange information by reading and writing data in the shared areas. The form of the data is determined by the processes and is not under the operating system’s control. The processes are also responsible for ensuring that they are not writing to the same location simultaneously.

statusnot read reprioritisations
last reprioritisation on reading queue position [%]
started reading on finished reading on

pdf

cannot see any pdfs




Both of the models just discussed are common in operating systems, and most systems implement both. Message passing is useful for exchanging smaller amounts of data, because no conflicts need be avoided. It is also easier to implement than is shared memory for intercomputer communication. Shared memory allows maximum speed and convenience of communication, since it can be done at memory transfer speeds when it takes place within a computer. Problems exist, however, in the areas of protection and synchronization between the processes sharing memory

statusnot read reprioritisations
last reprioritisation on reading queue position [%]
started reading on finished reading on

pdf

cannot see any pdfs




Protection provides a mechanism for controlling access to the resources provided by a computer system

statusnot read reprioritisations
last reprioritisation on reading queue position [%]
started reading on finished reading on

pdf

cannot see any pdfs




One important principle is the separation of policy from mechanism. Mecha- nisms determine how to do something; policies determine what will be done. For example, the timer construct (see Section 1.5.2) is a mechanism for ensuring CPU protection, but deciding how long the timer is to be set for a particular user is a policy decision

statusnot read reprioritisations
last reprioritisation on reading queue position [%]
started reading on finished reading on

pdf

cannot see any pdfs




Microkernel-based operating systems (Section 2.7.3) take the separation of mechanism and policy to one extreme by implementing a basic set of primitive building blocks. These blocks are almost policy free, allowing more advanced mechanisms and policies to be added via user-created kernel modules or user programs themselves

statusnot read reprioritisations
last reprioritisation on reading queue position [%]
started reading on finished reading on

pdf

cannot see any pdfs




The only possible disadvantages of implementing an operating system in a higher-level language are reduced speed and increased storage requirements

statusnot read reprioritisations
last reprioritisation on reading queue position [%]
started reading on finished reading on

pdf

cannot see any pdfs




although operating systems are large, only a small amount of the code is critical to high performance; the interrupt handler, I/O manager, memory manager, and CPU scheduler are probably the most critical routines

statusnot read reprioritisations
last reprioritisation on reading queue position [%]
started reading on finished reading on

pdf

cannot see any pdfs




In MS-DOS, the interfaces and levels of functionality are not well separated. For instance, application programs are able to access the basic I/O routines to write directly to the display and disk drives. Such freedom leaves MS-DOS vulnerable to errant (or malicious) programs, causing entire system crashes when user programs fail. Of course, MS-DOS was also limited by the hardware of its era. Because the Intel 8088 for which it was written provides no dual mode and no hardware protection, the designers of MS-DOS had no choice but to leave the base hardware accessible

statusnot read reprioritisations
last reprioritisation on reading queue position [%]
started reading on finished reading on

pdf

cannot see any pdfs




Everything below the system-call interface and above the physical hardware is the kernel. The kernel provides the file system, CPU scheduling, memory management, and other operating-system functions through system calls. Taken in sum, that is an enormous amount of functionality to be combined into one level. This monolithic structure was difficult to implement and maintain. It had a distinct performance advantage, however: there is very little overhead in the system call interface or in communication within the kernel. We still see evidence of this simple, monolithic structure in the UNIX,Linux, and Windows operating systems

statusnot read reprioritisations
last reprioritisation on reading queue position [%]
started reading on finished reading on

pdf

cannot see any pdfs




An operating-system layer is an implementation of an abstract object made up of data and the operations that can manipulate those data. A typical operating-system layer—say, layer M—consists of data structures and a set of routines that can be invoked by higher-level layers. Layer M, in turn, can invoke operations on lower-level layers

statusnot read reprioritisations
last reprioritisation on reading queue position [%]
started reading on finished reading on

pdf

cannot see any pdfs




A final problem with layered implementations is that they tend to be less efficient than other types. For instance, when a user program executes an I/O operation, it executes a system call that is trapped to the I/O layer, which calls the memory-management layer, which in turn calls the CPU-scheduling layer, which is then passed to the hardware. At each layer, the parameters may be modified, data may need to be passed, and so on. Each layer adds overhead to the system call. The net result is a system call that takes longer than does one on a nonlayered system

statusnot read reprioritisations
last reprioritisation on reading queue position [%]
started reading on finished reading on

pdf

cannot see any pdfs




researchers at Carnegie Mellon University developed an operating system called Mach that modularized the kernel using the microkernel approach. This method structures the operating system by removing all nonessential components from the kernel and implementing them as system and user-level programs. The result is a smaller kernel

statusnot read reprioritisations
last reprioritisation on reading queue position [%]
started reading on finished reading on

pdf

cannot see any pdfs




The main function of the microkernel is to provide communication between the client program and the various services that are also running in user space. Communication is provided through message passing

statusnot read reprioritisations
last reprioritisation on reading queue position [%]
started reading on finished reading on

pdf

cannot see any pdfs




One benefit of the microkernel approach is that it makes extending the operating system easier. All new services are added to user space and consequently do not require modification of the kernel. When the kernel does have to be modified, the changes tend to be fewer, because the microkernel is a smaller kernel. The resulting operating system is easier to port from one hardware design to another. The microkernel also provides more security and reliability, since most services are running as user—rather than kernel— processes

statusnot read reprioritisations
last reprioritisation on reading queue position [%]
started reading on finished reading on

pdf

cannot see any pdfs




In practice, very few operating systems adopt a single, strictly defined structure. Instead, they combine different structures, resulting in hybrid systems that address performance, security, and usability issues

statusnot read reprioritisations
last reprioritisation on reading queue position [%]
started reading on finished reading on

pdf

cannot see any pdfs




Article 1741684870412

Introduction
#puerquito-session #reading-puerquito-verde

Weak corporate governance is a common thread found in many company failures. A lack of proper oversight by the board of directors, inadequate protection for minority shareholders, and incentives at companies that promote excessive risk taking are just a few of the examples that can be problematic for a company. In response to company failures, regulations have been introduced to promote stronger governance practices and protect financial markets and investors. Academics, policy makers, and other groups have published numerous works discussing the benefits of good corporate governance and identifying core corporate governance principles believed to be essential to ensuring sound capital markets and the stability of the financial system. The assessment of a company’s corporate governance system, including consideration of conflicts of interest and transparency of operations, has increasingly become an essential factor in the investment decision - making process. Additionally, investors have become




#has-images #puerquito-session #reading-puerquito-verde
Weak corporate governance is a common thread found in many company failures. A lack of proper oversight by the board of directors, inadequate protection for minority shareholders, and incentives at companies that promote excessive risk taking are just a few of the examples that can be problematic for a company.

statusnot read reprioritisations
last reprioritisation on reading queue position [%]
started reading on finished reading on

Introduction
Weak corporate governance is a common thread found in many company failures. A lack of proper oversight by the board of directors, inadequate protection for minority shareholders, and incentives at companies that promote excessive risk taking are just a few of the examples that can be problematic for a company. In response to company failures, regulations have been introduced to promote stronger governance practices and protect financial markets and investors. Academics, policy maker




#puerquito-session #reading-puerquito-verde
In response to company failures, regulations have been introduced to promote stronger governance
practices and protect financial markets and investors. Academics, policy makers, and other groups have
published numerous works discussing the benefits of good corporate governance and identifying core
corporate governance principles believed to be essential to ensuring sound capital markets and the stability of the financial system.

statusnot read reprioritisations
last reprioritisation on reading queue position [%]
started reading on finished reading on

Introduction
per oversight by the board of directors, inadequate protection for minority shareholders, and incentives at companies that promote excessive risk taking are just a few of the examples that can be problematic for a company. <span>In response to company failures, regulations have been introduced to promote stronger governance practices and protect financial markets and investors. Academics, policy makers, and other groups have published numerous works discussing the benefits of good corporate governance and identifying core corporate governance principles believed to be essential to ensuring sound capital markets and the stability of the financial system. The assessment of a company’s corporate governance system, including consideration of conflicts of interest and transparency of operations, has increasingly become an essentia





Corporate Governance Overview
#has-images #reading-puerquito-verde
Corporate governance can be defined as: “the system of internal controls and procedures by which individual companies are managed. It provides a framework that defines the rights, roles and responsibilities of various groups . . . within an organization. At its core, corporate governance is the arrangement of checks, balances, and incentives a company needs in order to minimize and manage the conflicting interests between insiders and external shareowners.”

statusnot read reprioritisations
last reprioritisation on reading queue position [%]
started reading on finished reading on




#puerquito-session #reading-puerquito-verde
3.1.2 Creditors

Creditors, most commonly bondholders and banks, are a company’s lenders and the
providers of debt financing. Creditors do not hold voting power (unlike common
shareholders) and typically have limited influence over a company’s operations.

3.1.3 Managers and Employees

Senior executives and other high level managers are normally compensated through salary, bonuses, equity based remuneration (or compensation). As a result, managers may be motivated to maximize the value of their total
remuneration while also protecting their employment positions.

3.1.4 Board of Directors

A company’s board of directors is elected by shareholders to protect shareholders’ interests, provide strategic direction, and monitor company and management performance.

3.1.5 Customers
Customers expect a company’s products or services to satisfy their needs and
provide appropriate benefits given the price paid, as well as to meet applicable
standards of safety.

Compared with other stakeholder groups, customers tend to be less concerned with,
and affected by, a company’s financial performance.

3.1.6 Suppliers
A company’s suppliers have a primary interest in being paid as contracted or agreed
on, and in a timely manner, for products or services delivered to the company.

Suppliers, like creditors, are concerned with a company’s ability to generate
sufficient cash flows to meet its financial obligations.

3.1.7 Governments/Regulators

Governments and regulators seek to protect the interests of the general public and
ensure the well being of their nations’ economies.

As the collector of tax revenues, a government can also be considered one of the
company’s major stakeholders

statusnot read reprioritisations
last reprioritisation on reading queue position [%]
started reading on finished reading on





3.2 Principal Agent and Other Relationships in Corporate Governance
#has-images #puerquito-session #reading-puerquito-verde
A principal agent relationship (also known as an agency relationship) is created when a principal hires an agent to perform a particular task or service.

The principal agent relationship involves obligations, trust, and expectations of loyalty; the agent is expected to act in the best interests of the principal. In a company, principal agent relationships often lead to conflicts for example, when managers (as agents) do not act in the best interests of shareholders (as principals).

statusnot read reprioritisations
last reprioritisation on reading queue position [%]
started reading on finished reading on