Corporate Law Economic Reform Program Act 2004

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Corporate Law Economic Reform Program (Audit Reform & Corporate Disclosure) Act 2004, commonly called CLERP 9, modified the Corporations Act 2001 (Commonwealth) which governs corporate law in Australia. It was enacted in July 2004.

Corporate law body of law that applies to the rights, relations, and conduct of persons, companies, organizations and businesses

Corporate law is the body of law governing the rights, relations, and conduct of persons, companies, organizations and businesses. It refers to the legal practice relating to, or the theory of corporations. Corporate law often describes the law relating to matters which derive directly from the life-cycle of a corporation. It thus encompasses the formation, funding, governance, and death of a corporation.

Australia Country in Oceania

Australia, officially the Commonwealth of Australia, is a sovereign country comprising the mainland of the Australian continent, the island of Tasmania and numerous smaller islands. It is the largest country in Oceania and the world's sixth-largest country by total area. The neighbouring countries are Papua New Guinea, Indonesia and East Timor to the north; the Solomon Islands and Vanuatu to the north-east; and New Zealand to the south-east. The population of 25 million is highly urbanised and heavily concentrated on the eastern seaboard. Australia's capital is Canberra, and its largest city is Sydney. The country's other major metropolitan areas are Melbourne, Brisbane, Perth and Adelaide.

The changes were based on the reform proposals contained in the CLERP 9 discussion paper, Corporation disclosure - strengthening the financial reporting framework, which was released by the Australian government in September 2002. The 2004 amendments also enacted some reforms flowing from the recommendations in the Report of the HIH Insurance Royal Commission released in April 2003.

HIH Insurance former Australian insurance company

HIH Insurance was Australia's second largest insurance company before it was placed into provisional liquidation on 15 March 2001. The demise of HIH is considered to be the largest corporate collapse in Australia's history, with liquidators estimating that HIH's losses totalled up to A$5.3 billion. Investigations into the cause of the collapse have led to conviction and imprisonment of a handful of members of HIH management on various charges relating to fraud.

The important reforms to the Corporations Act included:

The CLERP 9 changes were intended to improve investor confidence in relation to listed corporations and their financial reports. The evidence regarding their effectiveness in this regard remains mixed. There is some evidence that changes affecting the board of directors were more important to small shareholders than large shareholders. [1] The costs and benefits of changes affecting auditors remain more contentious. [2] [3]

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Financial audit

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Corporate governance is the collection of mechanisms, processes and relations by which corporations are controlled and operated. Governance structures and principles identify the distribution of rights and responsibilities among different participants in the corporation and include the rules and procedures for making decisions in corporate affairs. Corporate governance is necessary because of the possibility of conflicts of interests between stakeholders, primarily between shareholders and upper management or among shareholders.

Investor relations (IR) is a strategic management responsibility that is capable of integrating finance, communication, marketing and securities law compliance to enable the most effective two-way communication between a company, the financial community, and other constituencies, which ultimately contributes to a company's securities achieving fair valuation. The term describes the department of a company devoted to handling inquiries from shareholders and investors, as well as others who might be interested in a company's stock or financial stability.

In a U.S. publicly traded company, an audit committee is an operating committee of the board of directors charged with oversight of financial reporting and disclosure. Committee members are drawn from members of the company's board of directors, with a Chairperson selected from among the committee members. A qualifying audit committee is required for a U.S. publicly traded company to be listed on a stock exchange. Audit committees are typically empowered to acquire the consulting resources and expertise deemed necessary to perform their responsibilities.

Auditors report

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The Keeping the Promise for a Strong Economy Act, 2002, also known as Bill 198, was an Ontario legislative bill effective April 7, 2003, which provides for regulation of securities issued in the province of Ontario. The legislation encompasses many areas. It is perhaps best known for clauses that provide equivalent legislation to the U.S. Sarbanes-Oxley Act (SarbOx) to protect investors by improving the accuracy and reliability of corporate disclosures. Thus, it is also known as the "Canadian Sarbanes-Oxley" Act or C-SOX (see-socks).

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Center for Audit Quality

The Center for Audit Quality (CAQ) is an autonomous, nonpartisan, nonprofit public policy advocacy organization based in Washington, DC. It is affiliated with the American Institute of CPAs.

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The Directors' Report is a document produced by the board of directors under the requirements of INDIAN company law, which details the state of the company and its compliance with a set of financial, accounting and corporate social responsibility standards.

The Australian Shareholders’ Association (ASA) educates investors and stands up for shareholder rights.

References

  1. ↑ Lee, Janet & Shailer, Greg. The Effect of Board-Related Reforms on Investors Confidence. Australian Accounting Review, 18(45) 2008: 123-134.
  2. ↑ Azizkhani, A., Monroe, G., & Shailer, G. Audit Partner Tenure and Cost of Equity Capital. Auditing: Journal of Practice & Theory 32(1) 2013: 183-202.
  3. ↑ Clout, V., Chappelle, E. & Gandhi, N. The impact of auditor independence regulations on established and emerging firms. Accounting Research Journal Vol. 26(2) 2013:88-108
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