Corporation – an artificial being created by operation of Top 10 Employers in the Philippines
law, having the right of succession and the powers,
attributes and properties expressly authorized by law or 1. San Miguel
incident to its existence 2. Nestle Philippines
3. Accenture
Stakeholders – anyone external or internal to the 4. BDO – Unibank
corporate organization that has interest and is directly 5. Ayala
or indirectly affected by the operations of the 6. Coca cola Philippines
corporation 7. SM Corporation
8. Google Philippines
1. Clients – customers, consumers 9. Procter and Gamble Philippines
2. Management – decision-makers, agents of 10. ABS – CBN
shareholders (Agency Theory)
3. Public – affected by any movement of the Auditing
corporation; it may be a customer or not
4. Creditors – those that lend money to the It is a systematic process by which an
business; or a supplier that has a receivable on independent and competent individual obtains
the business and evaluates evidences regarding assertions
5. Shareholders – investors; ordinary and about economic events and activities to
preference shareholder/stockholders ascertain the degree of correspondence
6. Employees – investors of industry or skills between those assertions and established
7. Government – regulators; benefits from the criteria and communicating the results to the
taxes paid by corporation; they need assistance interested users
from the corporations to provide the needs of Improves the Financial Statements by giving
the people credibility to it; to protect the shareholders
Purposes of a Corporation Interested users – primarily shareholders
1. Early stage of survival – build the momentum Auditing does not play a role on the accounting cycle,
first Accounting ends, Auditing begins
2. Earn profit – both for the shareholders and the
customers Kinds of Auditing
3. To offer vital goods and services 1. Internal Auditing
Involves internal auditor
Multinational Corporations Internal auditor in an internal employee
hired by the company
same as international corporation
2. External Auditing
has home country, centralized management
Involves external auditor
offers not varying goods, same everything
External auditor is a third party
host countries must report to home country
employee hired by the shareholders
Transnational Corporations
Internal auditing – an internal control, control placed
one kind of multinational corporation on departments to safeguard the interest of te
can make their products different depending on shareholders
the culture of the host country e.g., segregation of duties
they can decide on their own
Relation of good Governance and Auditing 2. Federal Form of Government (Federalism,
decentralized)
Good governance – the responsibility given to the a system that divided up power
management to increase shareholder values between a strong national government
and smaller local governments
Auditing – serves as checkpoint, to know if the controlled by a prime minister
management is doing right 80% of taxes is retained by the
administration, 20% is to be remitted
Reasons why management is acting in behalf of the for the protection of the country
shareholders
1. Compensation Significance of Organizational Structure to Good
2. Powers Governance
Chief Financial Officer (CFO) Organization – a complex and adaptive system which
Auditing is headed by him uses people, tasks, and technologies to achieve
Principally responsible for the financial risks of common goals
the business
Record keeping, reporting and financial Legislation and/or laws are nonsense of the
planning organization has a poor structure because such
laws cannot be implemented well
Audit Committee
Group of people internal to the company and is Organizational Structure – the pattern of relationship
obliged on overseeing the company’s financial among the positions in a business and the members of
reports and processed and the quality of the it
overall finance function
Part of the Board of Directors, performs check Boxes represent position
and balance Lines represent relationship
“One of the biggest decisions in the world is the hope Kinds of Organizational Structure
that the evils of the world are to be cured by legislation”
- Thomas Reed, 1886 1. Functional – structured by area of specialization
Forms of Government
1. Unitary form of Government (centralized) -
single power in which the central government is
ultimately supreme and any administrative
divisions exercise only the powers that the
central government chooses to delegate
Branches:
a) Executive
Advantage: Focus on a specific work
b) Legislative
c) Judiciary Disadvantage: Too much focus which lessens
knowledge regarding other fields
2. Product/Service – organization is divided by 4. Matrix
product or service line – a grid structure rather than hierarchical
– dual relationship
– project based structure
Advantage: Precise and Accurate Costing Advantage
Disadvantage: Competition (specific goal is for specific
Asset are well shared with other departments
product)
Relational aspect of staff internally
Disadvantage – lack of accountability
3. Geographical
Business Regulations from the Government
– usually for international or
multinational companies which basis 1. Advertising Regulations
rely on location
– cultures, belief and traditions shall be a) Advertisements should be true and not
considered misleading
– departments on lower management b) Businesses should be ready to back up
may vary their claims
– reason for variation of management is c) Advertisement must be fair to
because each country has its own competitors
advantage and specialization 2. Employment and Labor
Regulated by DOLE (Department of
Labor and Employment)
Interviews are tough because 30% of
the expenses of company goes to
payroll
Manpower is the biggest investment
Regulated by DOLE through Regional
Tripartite Wages and Productivity Board
(RTWP)
To determine salaries
Advantage: Country-specific focus
depending on industry,
Disadvantage: misalignment of roles to set the minimum
wage per municipality
3. Environmental Regulations
Through the aid of DENR with the aid of
Environmental Management Bureau
(EMB)
4. Privacy Regulations
5. Safety and Health
If the 5 regulations were completely
implemented, good governance exist
