IPA001 Ethics, Governance and Fraud

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This unit will provide a theoretical and practical understanding of corporate governance, fraud and forensic accounting.

The first aim is to develop an understanding of best practice in corporate governance. The second aim is to develop an understanding of the nature of fraud and apply theories and techniques relevant to preventing and detecting fraud.

Students will review and analyse the nature of forensic accounting with a focus on forensic fraud investigation. Theoretical explanations will be supported by findings from empirical research.

Unit Learning Outcomes

  • Understand corporate governance best practice including the role of the board of directors, board committees, executive compensation and corporate social responsibility.
  • Apply ethical theories and decision-making models to arrive at a responsible and ethical judgement and decisions.
  • Understand the importance of ethics and prioritise the responsibilities.

Topic Outlines
1. Foundations of Corporate Governance
2. Major Regulatory Influences on Corporate Governance
3. The Role of the Board of Directors
4. Board of Director Sub-Committees and Executive Compensation
5. Corporate Social Responsibility
6. Introduction to Ethics
7. Theories of Ethics and Ethical Decision Making
8. Ethics in the Corporate Environment
9. The Nature of Fraud - Financial Statement Fraud
10. The Nature of Fraud - Within Firm Fraud
11. Fraud Prevention and Detection (Forensic Accounting)

Unit Mode
Cloud (study anywhere)

Study Commitment
150 hours over the trimester

Assessments
One exam worth 100% of the final score.

The examination will be a two hour closed book examination with additional reading time. The exam will consist of a number of short answer, or problem based questions. You can typically expect four to seven questions in the exam.

A non-programmable calculator will be required for the exam.

All examinations will be held in venues notified by Deakin University. All exams will be held during the exam periods set by the University. Students will be notified of the exact date, time and location of the exam, approximately four weeks before the exam.

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Detailed Topics

Topic 1: Foundations of Corporate Governance
a. Role of corporate governance
b. Practical aspects and principles of corporate governance
c. Factors leading to corporate governance regulations
d. Theoretical explanations for corporate governance
e. Participants in corporate governance.
f. Research findings

Topic 2: Major Regulatory Influences on Corporate Governance
a. The Australian regulatory corporate governance environment and its operation
b. The ASX Corporate Governance Principles and Recommendations
c. Corporate compliance with the ASX Corporate Governance Principles and Recommendations

Topic 3: The Role of the Board of Directors
a. Purpose of the Board of Directors
b. Role and composition of the Board of Directors
c. Legal duties of Directors
d. Skills and attributes of Directors
e. Role and composition of the Audit Committee
f. Research findings

Topic 4: Board of Director Sub-Committees and Executive Compensation
a. Board sub committees
b. Insider trading
c. Executive remuneration disclosure
d. Non-binding executive remuneration vote
e. Research findings

Topic 5: Corporate Social Responsibility
a. Definition of corporate social responsibility
b. The importance of corporate social responsibility
c. The corporate social responsibility link to corporate governance
d. Evaluation of the case for corporate social responsibility
e. International approaches to corporate social responsibility
f. Research findings

Topic 6: Introduction to Ethics
a. What are ethics?
b. Ethical frameworks
c. Threats to ethical behaviour
d. Hierarchy of ethical decision making
e. Enron, Arthur Andersen and the aftermath

Topic 7: Theories of Ethics and Ethical Decision Making
a. Normative vs descriptive theories of ethics
b. Evaluation of theories of ethics
c. Ethical decision making
d. Kohlberg’s theory
e. AAA’s ethical decision making model

Topic 8: Ethics in the Corporate Environment
a. Corporate culture and employee behaviour
b. Fundamental principles
c. Ethical issues and responsibilities of a professional facing ethical pressures
d. Code of professional ethics/conduct
e. Factors which limit the effectiveness of code of ethics
f. Whistleblowing outcomes for employees

Topic 9: The Nature of Fraud - Financial Statement Fraud
a. What is fraud?
b. Types of fraud
c. Fraud myths
d. CRIME framework
e. Financial statement analysis
f. Corruption

Topic 10: The Nature of Fraud - Within Firm Fraud
a. What is asset appropriation?
b. How can it occur
c. The fraud triangle
d. Red flags and fraud risk indicators
e. Research findings

Topic 11: Fraud Prevention and Detection (Forensic Accounting)
a. Whistleblowing – definitions, reasons for and against whistleblowing
b. Reporting questionable acts
c. WorldCom and Comtronix cases
d. Principles and limitations of internal controls
e. Role of external auditor and forensic accounting in relation to fraud