The Role Of Audit Committees And Corporate Governance Accounting Essay

In order to better corporate administration, accounting organic structures, market regulators and committees has recommended the preparation of audit commissions. In 2001, after the creative activity of Douala stock exchange ( DSX ) , the Cameroon capital market authorization requested all listed companies to set up audit commissions. This survey focuses on the function of audit commissions and corporate administration in Cameroon listed companies.Particularly, how audit commissions operates in a developing economic system like Cameroon and how these patterns can be compared with those in the western economic systems every bit good as other emerging economic systems, the relationship of audit commissions with direction, internal and external hearers.The major accomplishments and challenges confronting audit commissions. This survey revealed that AC in Cameroon are challenged with unequal human resource capacity, the intervention of the authorities and kiping stockholders every bit good the fast changing legal and runing environment. However, there has been a singular betterment on the dependability of fiscal describing therefore vouching investor ‘s assurance. Key words ; Audit commissions, corporate administration, Cameroon, listed companies, direction, internal hearer, external hearer, OHADA ( organisation for harmonisation of concern jurisprudence in Africa ) , CMA ( capital market authorization ) , Decision devising.Table of ContentDeclaration Recognition List of Figures List of Abbreviations List of Tables AbstractionChapter 1 Introduction1.1 Introduction 1.2 Background 1.3 Motivation 1.4 The survey nonsubjective and Questions 1.5 The survey range 1.6 The restrictions .7 The survey constructionChapter 2 Conceptual model2.0 -IntroductionSection A ; Corporate Administration2.1- The Definitions of Corporate Governance 2.2- The Background of Corporate Governance 2.3- Corporate Governance Code 2.4 Corporate Administration mechanism 2.5 Corporate administration Environment 2.6 The Development of the construct of Corporate GovernanceSection B ; Audit Committee2.7 The Operationss of Audit Committees 2.7.1- The Charter 2.7.2 Composition of the commission 2.7.3 -Qualification and Experience 2.7.4- Meetings and Reports 2.8-The Relationship between Audit Committees, the direction, internal hearers and external hearers 2.9 The major Accomplishments and Challenges confronting Audit Committees. 2.10- Conclusion.Chapter 3 Theoretical Frameworks for Corporate administration and Audited accountCommittees3.1 debut 3.2 The Agency theory 3.3 Evidence on struggle of involvement between stockholders and directors 3.3.1 Conflict over Compensation 3.3.2 Conflict on variegation and wealth reduction investing 3.3 the Stewardship theory 3.3.1 Summary of the theoriesChapter 44.1 Corporate Governance issues in developing states. ( Cameroon ) 4.2 The legal and Regulatory model for Corporate administration of listed companies in Cameroon. 4.2.1The Role of Douala stock exchange ( DSX ) 4..2.2- The Board of Directors 4..2.3 The Audit Committee 4.2.4- The Stockholders 4. 2.5.The Role of the Governance 4.3- The Actors of Corporate Governance ; Stockholders and Directors Chapter 5 Research Methodology 5.1 debut 5.2 Questionnaire study 5.3 Administration of Questionnaires study 5.4 Responses of the questionnaire study 5.5 Interview Survey 5.5 Administration of interview studyChapter 66-Findings and Discussion 6.1- Operation of Audit Committees 6.2- Relationship of Audit commissions with direction, internal and external hearers 6.3- Accomplishments and ChallengesChapter 7, Conclusion, Refrences and AppendixChapter 1 Introduction1.1-IntroductionIn the past two decennaries, there has been turning attendings on corporate administration notably after the corporate prostration of high net income companies in the universe like the Enron and WorldCom. Corporate administration is now a first order issue largely in economic systems where companies are run by commanding stockholders ( Albuquerue and Wang, 2008 ) and a big figure of companies are seeking to follow better corporate administration patterns ( Garay and Gonzalez, 2008 ) .Traditionally, corporate administration is regarded as a mean by which companies safeguard the public assistance of its moneymans such as its investors, creditors and loaners. Today, with the current recession and planetary fiscal hurt, issue of corporate administration patterns in companies and the functions of different commissions are been studied. Audit commission is going the most widely used mechanism to guarantee good corporate administration in companies ( Chen et al, 2008 ) .The audit commission is an operating commission of the company ‘s board of managers that have some inadvertence duties such as the fiscal coverage, fiscal revelation, external hearers, internal auditing every bit good as control. A good figure corporate administration surveies has being carried out in developed states of Europe, United provinces of America and Japan ( Joshi and wakil,2004 ) .Very few surveies has being carried out and completed in less developed countries.Tsamenyi, Enninful-Adu and Onumah ( 2007 ) observes that corporate administration surveies in less develop states are limited and are available merely on single state footing. This survey tries to bridge the spread in anterior survey by adding more in our apprehension of the operations of audit commission and the major accomplishments of audit commissions in Cameroon. Furthermore, old research in developing states did non addressed the issue on how audit commissions relate with the direction, internal hearers and external hearers.In this survey, we seek to make full in this spread by look intoing on how audit commissions in Cameroon listed companies relate with the direction, internal hearers and external hearers1.2 BackgroundJensen and Meckling ( 1976 ) defined bureau relationship as a contract under which one or more individuals ( principals ) engages another ( agent ) to exert a service on their behalf. Directors or agents are being delegated the daily determination devising by stockholders. Directors are hence charged with the duties of utilizing and commanding the house ‘s economic resources.However the directors may non move ever to the stockho lders best involvement due to inauspicious choice and moral jeopardy ( Anthony and Govindarajan,2007 ; 531 ) . Therefore, stockholders has to supervise directors activities in order to guarantee that they live up to the commissariats of their contracts ( Goddard and Masters,2000 ) To avoid direction failures, Moldddoveanu and Martin ( 2001 ) argued that stockholders must ordain confirmation, monitoring every bit good as countenance ( wages and penalty ) mechanisms. Moldoveanu and Martin ( 2001 ) defined confirmation mechanisms as the tools used in formalizing the determinations of the agent, in giving concluding veto for an enterprise, directive or the action program of the agent. Monitoring mechanisms ( both ongoing and separate monitoring ) are use to detect, record and to mensurate the end product of the agent ‘s attempts. Furthermore, approving mechanism give selective wagess / or penalties to agents for/ or for non alining their attempts with stockholders aims or stockholders involvement. A good figure of corporate administration surveies has being carried out in developed states of Europe, United provinces of America and Japan ( Joshi and wakil,2004 ) .Very few surveies has being carried out and completed in less developed states.Tsamenyi, Enninful-Adu and Onumah ( 2007 ) observes that corporate administration surveies in less develop states are limited and are available merely on single state footing.1.3 MotivationProper corporate administration is a really imperative mechanism to reconstruct investor ‘s assurance, to enlarge the private sector, and to excite economic growing. It have been predicted that â€Å" good administration of companies will shortly go as important to the universe economic system as proper administration of single states. † Some people may see this as excessively early to hold, but this anticipation was suggested with grounds, if non evidently true today, so, is really likely to be true in the hereafter. The planetary recognition of the impact of events sing corporate societal irresponsibleness ‘s such as the fiscal crises in Asia, the corporate dirts in the universe high net income companies like Enron and WorldCom and the fiscal crisis in most African states in the last decennary.All these cases negatively affected the public assistance and the lives of many such as the employees, the pensionaries, house ‘s creditors and loaners. These raised the pressing demand for effectual and efficient ordinance of corporations and besides led to fear in market places, and a lessening in stock monetary values. In most underdeveloped states, like in Africa, the acknowledgment of lost chances to mobilise fiscal resources in domestic and international capital markets via good corporate administration took the involvement of most African Heads of State. This so inspired the African Heads of State to include good corporate administration as one of the four chief thematic countries subjected to reexamine under t he African Peer Review Mechanism ( the APRM ) .The four selected countries include, political administration and democracy, economic administration and direction, socio-economic development, and good corporate administration. The demand to closely supervise the operations of corporations can be justified by the undermentioned two grounds ; -The increasing involvement of the investors in developing states to put in listed companies. -The Potential additions or losingss that hinge on good direction of corporations can be financially profitable or economically annihilating1.4 Research aim and QuestionsThe research aim is to add more in the apprehension of the operations of audit commissions in footings of their composing, rank, independency, meeting and coverage, charter guideline every bit good as the accomplishments and challenges. The research besides aims at analyzing the relationship between audit commissions with the direction, internal hearer and external hearers. Finally we will compare our findings with those in western and other emerging states. To accomplish these purposes, the research worker seek to beg the sentiments of four bunchs of respondents in the three listed companies in DSX ( SEMC, SOCAPALM, and SAFACAM ) . ( I ) the presidents of audit commissions, ( two ) the company secretaries, ( three ) the finance caputs ; and ( four ) the external hearers of all the companies listed in the Douala Stoc k Exchange ( DSX ) . The undermentioned research inquiries will be address ; a ) How the audit commission operates in less states like Cameroon and how these patterns are compared with those in developed states B ) How audit commissions relate with direction, internal hearers and external hearers degree Celsius ) What are the chief accomplishments and challenges confronting audit commissions1.5 The survey rangeThe range of this survey is to analyze the function of audit commissions and corporate administration in developing states peculiarly in companies listed in the Douala stock exchange ( DSX ) Cameroon.The analyses will focus on on the operations of audit commissions in listed companies in DSX by looking at their manner of choice, composing, frequence of the commission meeting, coverage, making and experience, the accomplishments and challenges confronting audit commission. The old research in developing states did non addressed the point on how audit commission relate with the direction, internal hearer and external auditor.In this survey, the research worker seek to make full in this spread by look intoing how audit commissions in listed companies in Cameroon relate with the direction, internal and external hearers1.6 Restrictions.It is imperative for the research worker and the users of this research to be qui vive of the pertinent restrictions as they try to progress and understand the consequences of this survey ( Anderson and Poole, 2001 ) . We should acknowledge that the method of questionnaire study is entitled to built-in restrictions. Harmonizing to Matthews ( 2002 ) all studies are entitled to some built-in failings as some respondents give responses which they believe are expected of them, or which portray themselves and the organisation in the best visible radiation. This can be the instance of the responses of the participants in this surv ey which included AC presidents, company secretaries and finance caputs. They may hold overstated their appraisal of the AC patterns as this was seen to be more of import than the other group of the participants ( external hearers ) . Besides, it can be probably that the questionnaires were non clear, this causes respondents to construe some inquiries otherwise or on their ain manner. This survey was besides limited by the fact that the interview study sample size was excessively little ( merely 5respondents opted ) as carry oning more interviews would hold guaranteed a broader apprehension of the research issue, nevertheless the interview study was merely to complement the questionnaire study to acquire a deeper penetration of the findings1.7 The survey constructionThis paper will be made up of seven chapters, chapter one introduces the subject of corporate administration and audit commissions, it besides give the first apprehension of the thesis background, motive, research aims, research inquiries and the restrictions. chapter two which is conceptual model is in two subdivisions. Section one will be based on corporate administration definitions, its background, corporate administration codifications, mechanism, corporate administration environment and in conclusion the development of the construct of corporate administration. Section two of this chapter will establish foremost on the operations of audit commissions ( maps ) , subsequently focuses on the charter, composing which has to make with the inquiry of independency ( Joshi and Wakil,2004 ) , the factor of fiscal accomplishments as a requirement for audit commissions member is besides examined every bit good as audit commission meetings and studies.Blue Ribbon commission ( 1999 ) ) gave recommendation that audit commissions members must be financially literate. Second, this subdivision will speak about the relationship of the audit commissions with direction, internal hearers and external hearers. Last, this subdivision will speak about some of the major accomplishments and challenges confronting audit commissions. Chapter three will seek to analyse some theoretical models like the bureau theory and stewards theory. And so look at the some of the bureau jobs between directors and stockholders. This chapter will in conclusion give a belief sum-up of the two theories ( bureau and stewardship theory ) In chapter four, the research worker will speak about corporate administration issues in developing states ( Cameroon ) , the legal and regulative model of corporate administration in listed companies in the Douala stock Exchange ( Cameroon ) concentrating on the function of the Douala stock exchange, the authorities of Cameroon, the board of managers, stockholders and audit commission, This chapter will look in conclusion at the histrions of corporate administration which involves the stockholders and directors. Chapter five which is research methodological analysis, the research worker will establish his research method on questionnaire and interview study turn toing the survey objectives.This questionnaires will be based on the operations of audit commissions, composing, independency, fiscal literacy, relationship, self-evaluation every bit good as the major accomplishments and challenges.they will largely be â€Å" true or false † type inquiries while others will ask the respondents to rate the commissions achievement with a mark of 4 ( to a greater extend ) to a mark of 1 ( non at all ) Chapter six will concentrate on the findings and treatments sing the research consequences. The findings and treatments will focus on on the operations of audit commissions, the relationship with direction, internal and external hearers every bit good as the accomplishments and challenges. Figure 1.thesis lineation.Chapter 2 Conceptual Frameworks2.0-IntroductionScandals, Frauds, every bit good as corporate failures has increase the demand for reforms and better ordinances more particularly in the Fieldss of corporate administration. In the early 1990s, in united land, a good figure of issues like the prostration of Maxwell concern imperium, leaded to the stimulation of treatments and statements refering the constructions for commanding executive power ( power2002 ) .In December 1992, a codification of best patterns was published ( the Cadbury codification ) .this codification gave recommendations to companies to organize audit commissions consisting of independent non-executive managers ( power2002 ) In United provinces of America, the addition figure of net incomes restatements in public traded companies, together with the fiscal statement fraud allegations every bit good as deficiency of responsible corporate administration in extremely profitable companies like Enron, Global crossing, World com In USA, Leisurenet in south Africa have sharpened the increasing attending in corporate administration every bit good as audit commissions in peculiar. The diminution of these companies raised much concerns sing the deficiency of argus-eyed inadvertence by boards of managers and audit commissions in fiscal coverage procedure scrutinizing maps ( Rezace et al,2003 ) .George W Bush, USA president in the province of the brotherhood reference, mentioned the gravitation of this job by saying that â€Å" Through stricter accounting standard and tougher revelation demands. Corporate America must be made accountable to employees and stockholders and held to the highest criterion of behavior ( B ush,29th January 2002 ) † .In USA a good figure of committees, ordinances and audit commissions has been formed to turn to corporate administration issues in USA. some of these include Tread manner committee ( 1987 ) , the Blue Ribbon commission ( 1999 ) .Further more, the 2002 sarbanes-oxely act was signed in to jurisprudence and one of its chief proviso were that all listed companies set up audit commissions ( Joshi and wakil,2004 ) Rezace, Olibe and Minmier ( 2003 ) stated that good corporate administration promote relationships of answerability between primary corporate participants and this will travel a long manner to heighten corporate public presentation as direction holds answerability to the board and the board is held accountable to the stockholders. One of the board chief map is to guarantee quality accounting policies, internal controls every bit good as independency. This will cut down fraud and fiscal hazard are anticipated every bit good as advancing accurate, high quality and timely revelation of fiscal and other information to the stockholders. CMA ( 2002 ) defined corporate administration as the procedure and the construction used to direct and pull off concern personal businesss of the company towards heightening prosperity and corporate answerability with ultimate aim of recognizing stockholders long-run value while taking in to account the involvement of other stakeholders. In Cameroon, corporate administration issues has been taken really serious.the Cameroon capital market authorization ( DSX ) in concurrence with commonwealth association for corporate administration has produce a sample codification for best patterns in corporate administration in June 2001.One of the cardinal recommendations in the Douala stock exchange ( DSX ) ( 2001 ) is that all listed companies establishes audit commissions consisting of independent non-executive managers which has to maintain under reappraisal the range and consequences of audit, their effectivity, independency and hearers objectivenesss. The codification further stated that separate audit commissions enables the board in deputing to the sub-committee the duty for thorough and item reappraisal of the audit affairs, besides to enables non-executive managers in lending independent judgement and have a positive function to play in an country in which they are peculiarly fitted and offer the hearers a direct nexus with non-executive managers ( CMA,2002 ) In south Africa, mangema and chamisa ( 2008 ) found out that the likeliness of a house to be suspended from the stock exchange is higher in houses without audit commission. This therefore suggest the importance and the necessity of audit commissions in Africa. This chapter will be divided in to two subdivisions. Section A will concentrate on conceptual model for corporate administration while subdivision B will concentrate on conceptual model for audit commissions.Section A. Corporate Administration2.1 The Definitions of Corporate GovernanceStates are different from one another in footings of engineering, civilization, political system, economic and historical development ( Roman,2001 ) .There differences make the definition of corporate administration to change from state to state therefore doing it really hard to came out with a universally acceptable definition of corporate administration. Shleifer and Vishny ( 1997 ) defined corporate administration while looking at the ways in which the providers of fundss to the steadfast assures themselves of good return for their investing. However this definition merely laid more accent on the providers of fundss, it fails to acknowledge the relationship that exist between the house ‘s directors and stakeholders since every house has many stakeholders with different involvements that must be taken attention of by the house. It is in this respect that corporate administration is besides looked upon as a corporate group of people united as one individual who has the power or authorization to command an organisation ( Ruin,2001 ) Australian criterion ( 2003 ) defined corporate administration as a pattern in which companies are controlled, directed and held to account. Harmonizing to Australian criterion ( 2003 ) corporate administration therefore comprises of power, answerability, leading, stewardship way every bit good as control. This definition takes in to consideration the demand of cheques and balances in organisation direction procedure, therefore it can be regarded as more comprehensive ( Gregory,2000 ) .The Australian criterion definition is besides similar to other definitions like that given by audit committee ( 2009 ) which emphasis the importance of answerability and control in organisational administration. The presence of many different definitions for corporate administration shows that every writer formulates a definition that suit his or her subject. ( Deunb and neubeuer,1992 ) .For case, harmonizing to Turnbull ( 1997 ) corporate administration influences all houses activities that produces good and or services, harmonizing to Colley et Al ( 2004 ) corporate administration is the act of regulating whereas Cadbury ( 2000 ) specify corporate administration harmonizing to the system by which the house is directed and controlled. However Wallace and Zinkin ( 2005 ) pointed out clearly that the term good corporate administration is really easy to give voice but hard to understand and appreciate.2.2 – The Background of Corporate GovernanceThe construct of corporate administration is been used both in economic sciences and in jurisprudence, and it is understood to intend enforcement of contract, protection of belongings right every bit good as corporate action ( McNutt,2010 ) , onc e and for all, corporate administration is associated with people runing within the organisation, nevertheless the organisation has to be decently governed in order to accomplish their set aims. This construct of corporate administration became more normally used and spoken in 1980s ( parker,1996 ) nevertheless it originated in 19th century when incorporation was advocated for as a agency of restricting liability ( fletcher,1996.vinten,2001 ) .The creative activity of registered companies is being perceived as the existent starting point for the treatment on corporate administration ( Adams,2002 ) .This enrollment of companies was supported by the joint stock companies act of 1844 ( Uk ) .The silver demand of modern corporation lead to the separation of control map from ownership ( Berles and means,1967 ) .With this separation, house ‘s proprietors no longer exert control over the house ‘s action because it was seen as a function of professional directors or agent ( kiel and Nicholson,2003 ) .This so propose the demand of corporate administration to protect house ‘s proprietors from the actions of directors.In respond to this demand, the limited liability a ct 1855 ( UK ) was created to protect stockholders from debts above their parts Francis ( 2000 ) argued that the demand for corporate administration patterns became more pronounce in 1980s.This was because during this period, several parts of the universe were sing stock market clangs every bit good as corporate failures in some cooperation due to hapless administration. Harmonizing to united nation,1999 ) corporate prostration was the cardinal driver for alteration to corporate administration codifications. In 1980, as more and more corporate entities continue to fall in in assorted parts of the universe, there were alteration of attitude with greater public presentation outlooks on the house ‘s direction board.It was besides realized here that the house has to be run by the director whereas the board ensures that the house is being run efficaciously ( Adams,2002 ) . The acceptance of the thought of corporate administration can besides be supported on a positive note. There was a turning recognitions that improve corporate administration is indispensable for growing and the development of the state ‘s economic system ( Carkr,2004, Department of Treasury,1997 ) .A survey that was carried out in United States of America by Gompers, Ishii and Metricck,2003 ) reveals that there is a strong correlativity ship between good corporate administration patterns and stockholders public presentation. This survey further reveals that over 60 % of investors were prepared to pay pore on portion of companies with good corporate administration patterns.2.3 Corporate Administration Code ( CGC )In most states, the best mechanism to heighten choice corporate administration reforms is through the execution of corporate administration codification to supplement the already bing concern Torahs. Corporate administration codification can be defined as paperss which stipulate the regulations and processs for regulating and pull offing organisations ( Dabor and Adeyemi, 2009 ; Ugoji and Isele, 2009: Scott, 2007 ; Classeens and Bruno, 2007 ) .While corporate administration involves the procedure by which organisations are governed and controlled with the purpose of adding stockholders values every bit good as meeting stakeholders outlook ( CBN, 2006 ; Iyang, 2009 ) , corporate administration codifications on its portion, flatly stipulates the regulations, rules and the best patterns for pull offing and regulating organisation ‘s efficaciously ( Okhealam and Akinboade, 2003 ; Amstrong, 2003 ; Gatamah, 2008, Andreason, 2009 ) . Most of these codifications are implemented by self-professional regulation bureaus but under the supervising of authorities regulative organic structures. However, the duty for companies to follow and implement these codifications depends on the company ‘s board of managers ( Elebute, 2000 ; Iyang, 2009 ; Sanusi , 2003 ; Soludo, 2004 ) .Therefore, the chief duties of the board of managers are to vouch choice administration public presentation, add stockholders values, preserve the involvement of stakeholders, protect the environment and warrant precise fiscal coverage ( Alo, 2003, WILSO? 2006.dabor and Adeyemi, 2009 ; Roe 2003 ; Ahmed 2007 ; Olusa, 2007 ; Elebute, 2000 ; Iyang 2009 ; Sanusi 2003 ; Soludo, 2004 )2.4 Corporate Administration MechanismCorporate administration mechanism involves the procedures through which a state ‘s concern Torahs and corporate administration codifications are been imposed. ( Reed, 2002 ) .Corporate administration mechanism consist of agencies to supervise, nevertheless the effectivity of the corporate administration mechanism lies on the regulative models and public administration strategy in each state. ( Wilson, 2006 ; Dabor and Adeyemi,2009 ; Ro, 2003, Ahmed, 2007 ; Olusa,2007 ) .the best enact of corporate administration codification is achieve thr ough modulating professional organic structures in confederation with the authorities modulating bureaus and with the stock market governments ( Vintem, 2002, Reed, 2002 ; Wilson,2006 ; oe, 2003 ) The premise or the thought that, the presence of many corporate administration mechanisms will frequently allow to good corporate administration has been proven incorrect by the high degree of corruptness, fraud and dirts in Cameroon and in other parts of the universe. The credence of corporate administration codification by most companies in the private sector is merely a conformity and non an indicant that the companies will oblige themselves to good ethical concern patterns ( Rossouw, 2005 ; Gatamah, 2008 ; Iyang,2009 ) .In Cameroon, over 70 % of the companies listed in the Douala stock exchange have a adopted the corporate administration codification but there are still incidences of frauds, embellzement, deficiency of answerability and unity.2.5 Corporate Governance EnvironmentHarmonizing to Li and Nair, ( 2009 ) , corporate administration environment takes in to consideration the consequence of factors like the state ‘s political system, the economic stableness and socio- cultural factors that can heighten good administration or prevent unethical concern operations ( Li and Nair,2009 ) .Therefore corporate administration environment embodies the state ‘s political, economic, technological, societal and legal systems that affect ethical concern patterns in corporations ( Amaeshi and Amao, 2008 ; Wilson, 20006 ) .Corporate administration so serves as a barometer to mensurate the company ‘s overall public presentation, their strategic pick, determinations and actions. Though the political, economic and socio-cultural consequences of the freshly formed corporate administration codifications in Cameroon are still under probe, the codifications are created or formed to safeguard companies against sick duties like corruptness, environmental maltreatment, and companies misdirection ( Gatamah, 2008 ; Andreason, 2009 ) .2.6- The Development of the Concept of Corporate GovernanceDue to cultural, political, economic and technological differences betw een states, the thought of corporate administration was adopted but with major fluctuations, as a consequent, a assortment of corporate administration model was established. However two major attacks of corporate administration patterns is identified with fluctuation originating merely on the different legal systems at work in assorted states Harmonizing to Solomon and Solomon, ( 2004 ) , Department of Treasury ( ,1997 ) ; states that patterns common jurisprudence like united provinces of America, united land, Canada, and Australia develop a type of corporate administration construction which focuses on stockholder ‘s involvement ( return ) .In this respect, corporate administration has to guarantee that the company achieves the aims set by the stockholders. This type of corporate is is known as foreigner theoretical account of control as it recognizes the spread between the troughs of a house and its proprietors ( Department of Treasury,1997 ) . On the contrary, states with civil jurisprudence such as Germany, France, and Netherlands develop their corporate administration which focuses on stakeholders. In this respects, corporate administration has to equilibrate the involvement of cardinal groups like the employees, directors, creditors and clients ( Solomon and Solomon,2004 ) .This attack is called insider theoretical account of control since it recognizes that the greater control in the house is held by those closer to its existent working ( Department of Treasury,1997 ) However the two attacks have some similarities. For case, they both opted for the fact that the direction boards of the house were to be elected by the house ‘s stockholders to put policies and so depute to the direction the full authorization to pull off the house ( Hilmer,1998 ) .Anyway, it was realized that most states adopted a system of corporate administration with the mixture of the two extremes ( Solomon and Solomon,2004 ) Nowourdays, corporate administration is an international issue because of concern globalistion.3It is seen to play a major function in the direction of companies in both developed and less developed states. However, Davis and schlitzer ( 2008 ) pointed out that corporate administration patterns are non unvarying across states, that each state tend to follow corporate administration processs based on factors like the state legal system, the fiscal system of the state, the state cultural and economic state of affairs and the corporate ownership construction of the state ( the organisation for economic cooperation and development,1998 ) .Section B: Audit Committee2.7-The Operationss of audit commissionsThe audit commissions has as it premier map to help the board in carry throughing its inadvertence duties. By so making, they review the fiscal information that has to be provided to the stockholders, other stakeholders and to the system of internal controls that has been established by t he boards of managers and the direction ( Bean, 1999 ) Bean ( 1999 ) pointed out some of the general duties of audit commissions: -The audit commission has to supply an unfastened ambiance for communicating between internal hearer, independency hearers and the board of managers. -They have to describe actions to the BODs and do some recommendations -The commission have the power to transport out or authorise probes in affairs within the commission ‘s range of responsility.The audit commission has to retain an independent advocate and comptroller if needed to help in an probe2.7.1- The charterIn developing states, audit commission ‘s faces a batch of troubles in transporting out their maps because of deficit in accounting accomplishments ( waweru, Hoque and Uliana, 2004 ) . A batch of writers have undertaken surveies on the inadvertence duties of audit commissions.Most of these surveies reveals that there is a broad fluctuations in sensed and declared duties.According to Kalblers and Fogarty ( 1993 ) survey, the duties of audit commission include inadvertence of fiscal coverage, internal controls and external hearer. Peter coopers and Lybrand ( 1995 ) and Dezoort, Hermanson, Archambeault and Reed ( 2002 ) in their survey found out that the duties of audit commissions revolved chiefly in countries of fiscal coverage, scrutinizing and overall corporate administration. It has being argued by Guy and Burke ( 2001 ) that all companies with audit commissions must develop a seamster made charter that describes the commissions composing and specifies entree to allow resources. The charter has to be approved by the board which so serves as a usher to the commission in transporting out the assorted duties delegated to them by the full board of managers.According to Bean ( 1999 ) , comprehensive charter enhances effectual public presentation of the audit commission, serves as a roadmap for members of the commissions by doing a clear definition of the duties and supply a systematic treatment construction among the commission and the direction every bit good as public comptroller ( Bean,1994 ) . A charter helps scrutinize commissions members to concentrate on their specified duties and besides the charter enable or assist stockholders in measuring the function and duties of audit commissions ( KPMG,1999 ) . In Cameroon, audit commissions authorization is got ten from capital market act which requires that some authorization has to be delegated to the audit commission by the board.2.7.2- The composingHarmonizing to Joshi and Wakil ( 2004 ) , one of import variable of composing of the audit commission is the inquiry of independency ( joshi and wakil, 2004 ) . Br aiotta ( 1999 ) pointed out that the effectivity of an audit commission depends on the background of the commission ‘s members which have to dwell of both fiscal and non fiscal skilled people ( Braiotta,1999 ) . The success or failure of the commission ‘s operation relies on the president, hence great attention has to be taken when taking the president ( Braiotta,1999 ) .According to Braiotta ( 1999 ) , the figure of audit commission member depends on the duties and authorization of the commission and besides on the size of the board and the company. The figure of the members vary from one state to another ( Braiotta,1999 ) There are turning statements on whether the commission members should be independent as advocated by Bean ( 1999 ) , the Blue Ribbon ( 1999 ) every bit good as it was adopted in Cameroon by the Capital Market Act in 2001 ( Hussein,2003 ) or should it depend on the environing fortunes of a peculiar company ( Attwood,1986 ) .According to Bean ( 1999 ) , an independent manager is one who is free from any relationship that can act upon his or her judgement as a member of the audit commissions ( Bean,1999 ) .However this is hard to find ( Pomeranz,1997 ) In Cameroon, the issue of independency of most managers is been affected by that fact they serves as managers in more than one listed company. This is as a consequence of deficit in skilled human resources capacity in Cameroon and besides due to the fact that most listed companies in Cameroon are little in size therefore doing it hard to pull people with qualified accomplishments.2.7.3-The Qualification and Experience.There are different point of views on the demand of fiscal literacy as a making for audit commission members. The Blue Ribbon commission ( 1999 ) recommended that all audit commission members has to be financially literate. Harmonizing to Rezaee et Al ( 2003 ) , fiscal literate is define as the ability to read and understand fiscal statement. However Herdman ( 2002 ) questioned the issue of whether the demand about fiscal literacy of audit commission members by the capital markets went far plenty. On the contrary, Jonathan and Carey ( 2001 ) argue on whether in a univer se of of all time more complicated accounting criterion, where even to the full trained comptroller can fight to understand, if this is a realistic and a necessary demand as a member of the audit commission ( Jonathan and Carey,2001 ) . In USA, surveies were carried out in countries of experience and expertness. The United states General Accounting Office ( GAO ) ( 1991 ) found out that over half of the 40surveyed audit commission chairs from big US Bankss reveals that their audit commissions were runing with no members with expertness in accounting, scrutinizing and jurisprudence inadvertence ( GAO,1991 ) .2.7.4- Meeting and ReportsHarmonizing to Guy and Burke ( 2001 ) , audit commissions have to schedule meetings two to four times per twelvemonth depending on their range of activities and the company size. Graziana ( 2004 ) argued on the point that audit commission has to run into more often, both officially and informally.Formal meeting has to be held a least 4 times and sometimes up to 12 times per twelvemonth, this 4 meetings are in individual and last for about 4 hours. ( Graziana,2004 ) .These meetings must include the senior direction, external hearer and the internal hearer ( Graziana,2004 ) .Furthermore, t he board has to depute the authorization ot the audit commission to keep particular meetings as needed ( Guy and Burke,2001 ) . Some surveies have being carried out on the frequences of audit commission meetings.Menon and Williams ( 1994 ) made a research on 200 companies and found out that the figure of audit commission meeting was increasing as the figure of outside managers increased ( menon and Williams,1994 ) .Studies have shown that meeting frequence is positively related to the company ‘s size, monitoring and the demand of audit commission meeetings. Price WaterHouse Cooper ( 1999 ) saw that audit commissions in European companies meet averagely 3 to 4 times per twelvemonth. The audit commission ‘s study has to be addressed to the BODs and must include their findings and recommendations sing the effectivity of the maps of internal and external hearers and other countries within the commission ‘s legal power as stated in the charter. Besides, the study has to establish on the engagement of the members in audit panning procedure and their monitoring activities ( Braiotta,1999 ) .2.8-The Relationship with Management, Internal hearer and External hearer.Harmonizing to Blue Ribbon commission ( 1999 ) , a company can merely accomplish quality fiscal coverage when there is an unfastened and blunt communicating every bit good as a co-working relationship between the board of managers, audit commissions, the direction, internal and external hearers. It has being argued Rezaee et Al ( 2003 ) that the most effectual attack is for the audit commission to work in coaction with the direction and the hearers to enable them place complex activities of the co mpany, identify and asses the comparative hazards, find the accounting intervention and besides to acquire a complete apprehension of their impact on free and just presentation of fiscal public presentation in order to cut down deceitful activities ( Rezaee et al,2003 ) .Members of the audit commissions have to be sufficiently knowing to inquire tough inquiries to the direction every bit good as the internal and external hearers sing the study quality, transparence and the dependability of the studies. However, in developing states like Cameroon, most of the listed companies are institutionally owned and these establishments are owned by the authorities, as a consequent, some members serves in the board due to their virtue place in the authorities and non because of their making or experiences. Braiotta ( 1999 ) stated that the audit commission has to be independent from CEO, nevertheless the CEO holds the best information beginning related to the concern and they guarantee speedy respond to the petition of the audit commission, therefore doing the relationship with the CEO the key. ( Braiotta,1999 ) . The BODs has the duty of reexamining the overall effectivity of internal controls system but in world, the board can depute this duty to the audit commission ( Zaman,2001 ) .The board so has to make up one's mind on the function of audit commission in the reviewing procedure, the function of audit commission in the reappraisal procedure besides depends on factors like the size, the board composing and the nature of the company ‘s chief hazards ( Zaman,2001 ) . Harmonizing to Braiotta ( 1999 ) , it is necessary and of import for the audit commission and the hearers to set up a good working relationship that is non counterproductive ( Braiotta,1999 ) .There is a co-relationship between the plants of the audit commissions and independent hearers because they both have common fiscal aims. Following the Sarbabes-Oxley Act in the United States, it is legal for the hearers to describe to the direction. The audit commission has to O.K. all services both audit and non-audit, they get all new accounting and scrutinizing information from the hearers and they besides serve as an o official communicating line between the company and the hearers ( Tackett,2004 ) .The fact that the audit commissions are given the authorization in doing determinations about hiring and firing the hearers, has removes from the direction the ability of endangering the hearer with dismissal if the hearers fails to execute to the direction best involvement, moreover, the audit commission are required to do blessing to all payments made to hearers for their services like scrutinizing therefore doing it hard for direction ot bargain unneeded services from hearers with the hope that the hearers will give them some favourable interventions, in conclusion, the fact audit commissions are required to cover with any dissension between the direction and the hearers, makes it hard for direction to look in questionable accounting patterns. Knapp ( 1987 ) made a surveyed on 179 audit commissions members and found out that, when there is audit difference, the audit commission tend to back up the hearers and non the direction.2.9- The Major Accomplishments and Challenges confronting audit commissionsSeveral sentiments has being raise sing the utility of audit commissions.According to Guy and Burke ( 2001 ) merely 22 % of the executive managers of FTSE 100companies have the construct that audit commission are helpful in accomplishing good corporate administration while 78 % remain unconvinced about the value of audit committees.However,89 % of the non-executive managers in FTSE 100companies have the believe that audit commissions are critical or helpful in accomplishing quality administration ( Guy and Burke,2001 ) .Menon and Williams ( 1994 ) carried out a survey on whether companies depends on the study of their audit commission, this survey reveals that companies do non trust on their audit study though they voluntarily formed the commissions, therefore these commissions were established for other intents. ( Menon and Williams,1994 ) .According to Joshi and Wakil ( 2004 ) , audit commissions are widely used in big companies and in companies with higher proportion of no executive managers ( Joshi and Wakil,2004 ) . Due to the demand of corporate administration in companies, a batch of force per unit area is being mounted on audit commissions in supervising the unity of the house ‘s fiscal coverage activities. There are higher outlooks from the non-executive managers functioning as audit commissions members ( Jonathan and Carey,2001 ) .It is recognize that the duties of audit commission are increasing which has to make with affairs refering hazard direction, internal control, other regulative demand, the independency of external hearers and besides the move to international accounting criterion ( Jonathan and Carey,2001 ) .Furthermore, many stakeholders are interested in the house ‘s activities but with different dockets therefore doing it more complex and hazardous helping in audit commission or on boards. The Sarbane-Oxley for case provinces that failure to execute will ensue to legal actions. Rezaee et Al ( 2002 ) pointed out that the inclusion of the study of audit commissions in proxy statements serves as challenges for the audit commissions. The commission members do non exert their full engagement in the readying of the fiscal statements therefore increasing their hazard ( Rezaee et al,2002 ) .2.10-ConclusionSurveies carried out in developed states shows that good corporate administration reduces deceitful gaining direction ( Rezaee et al,2003 ) . In fact, the corporate failures in some high net income companies are attributed to miss of argus-eyed inadvertence by the boards. It is instead unfortunate that there exist no empirical survey on the overall effectivity of corporate administration in Africa, Mangema and Chammisa ( 2008 ) observed that because of state differences in Africa, it will be much nicer and clear to analyze the assorted administration constructions individually in every state. This survey tries to bridge the spread in anterior survey by adding more in our apprehension of the operations and the major accomplishments of audit commissions in Cameroon. A batch of empirical surveies have being carried out refering the operation and the functions of audit commissions in different states. For case, in Canada, Maingunt and Zeghal ( 2000 ) investigated the aims, composing, choice, frequence of the commission meeting, the relationship of audit commission with direction and hearers. ( maingunt and zeghal,2000 ) . The old research in developing states did non turn to the point on how audit commissions relate with the direction, internal hearer and external hearers. In this survey, we want to make full in this spread by look intoing how audit commissions in Cameroon listed companies relate with the direction, internal hearers and external hearers.Chapter 3 The Theoretical models for Corporate Governance andAudit Committee3.1 IntroductionThe bureau theory have influenced recent believe about concern direction and policies. This tides that directors do non ever move to stockholders best involvement unless suited administration constructions are imposed to safeguard stockholders public assistance. ( Jensen and meckling, 1976 ) .The BODs have a great function to play here more particularly in the relationship among president and the CEO ( Tricker,1984 ) .the involvement of stockholders can merely be protected when the board chair is non detained by the CEO or when both the stockholders and the CEO have the same involvement ( Williamson, 1985 ) . Harmonizing to Berles and agencies ( 1932 ) a individual stockholder can non exert control over a house whose capital is expeditiously and sufficiently dispersed. Therefore capital scattering allows directors to exert illicit power on behalf of stockholder. Directors determinations and actions are been monitored and evaluated by the audit commission formed by the board.The audit commission so serves as a nexus between the direction and the board and besides to protect stakeholders welfare.. The bureau theory and the stewardship theory are two finance theories that covers the construct of corporate administration and the function of audit commission to heighten good administration.3.2 The Agency theoryAgency theory can be define as a contract in which one individual ( the principal ) engages another individual ( the agent ) to execute some services on his or her behalf ( Jensen and meckling,1976 ) . Harmonizing to Kiel and Nicholson ( 2003 ) , due to the separation of control and owne rship maps, directors has to pull off the house on behalf of the house ‘s proprietors. However conflicts ever arises when the directors are non pull offing the house to the proprietors best involvement ( Eisenhardt,1989 ) .The bureau theory therefore is more concern in analysing and work outing jobs or struggles that occurs between houses proprietors and directors. By so making, the bureau theory assumes that the function of a company is to maximise stockholders wealth ( Blair,1995 ) The bureau theory relay on the fact that, most concerns are runing with uncomplete information and with a batch of uncertainness. These conditions so exposes the concern to two major bureau jobs ; inauspicious choice and moral jeopardy. The job of inauspicious choice occurs when the stockholder ( chief ) can non determine whether or non he director ( agent ) accurately stand for his or her ability to make the occupation for which he or she is being paid for ( Eisenhardt,19989 ) .Moral jeopardy on the other manus is when the stockholder ( chief ) is non certain that the director ( agent ) has put forth his or her maximal attempts ( Eisenhardt,1989 ) .According to this theory, directors have superior information that which let them to hold advantage over the house ‘s proprietors, directors may so be more motivated to fulfill their single public assistance instead than the public assistance of the stockholder ( Berles and means,1967 ) It has being argued by Donaldson and Davis ( 1991 ) that unless quality corporate administration constructions are implemented to safeguard stockholders involvement, directors will non ever move to maximise stockholders returns. In this respect, the bureau theory supported that the intent of corporate administration is to cut down the potency of directors moving reverse to stockholders involvement. The bureau theory further argued on the point that, top direction of the house must hold important portion of the house so every bit to keep a positive relationship between corporate administration and the figure of stock owned by the top direction ( Mallin,2004 ) .According to Wheelen and Hunger ( 2002 ) , conflicts or jobs ever occurs in a company when the top direction is non willing to be held responsible for their determinations unless they have a sensible sum of stock on the company ( Wheelen and Hunger,2002 ) .The bureau theory besides advocated for the regulations and inducements that align directors behaviours with the involvement of stockholders ( Hawley and Williams,1996 ) , nevertheless it is practically impossible to compose down the regulations that governs all the scenarios that the employees brushs3.3 Evidence on struggle of involvement between stockholders and directors.following theoretical sentiments on the motivations for struggles of involvement among stockholder s and directors, a good figure of research have reveals plenty proof proposing the happening and significance of bureau struggles between companies stockholders and directors related with hazard disagreement, privilege and fiddling problem.these research centres their findings on the struggle of involvement sing affairs of compensation, variegation, and investing3. 3.1 Conflicts of involvement over compensationA batch of surveies observe the association between directors, compensation and company public presentation and consequences shows regularity with conflicting involvements between stockholders and directors. A typical research is that conducted by Jensen and Murphy ( 1990 ) .this survey found a weak relation between directors compensation and public presentation. To intensify this, there is the cogent evidence that directors wealth are more sensitive to the size of plus than to the market value ( Jensen and potato, 1990 ) , this so opposes Rosen ‘s ( 1982 ) premiss that the size and wage relationship is because large companies employ more able executives. Agrawal and Knoeber ( 1998 ) perceive that coup d'etat menace have two beliing effects on managerial compensation. The first premiss is that of the consequence of market competition for directors, this leads to less ability for troughs to demand higher wages.the 2nd premiss is that of hazard consequence which in contrasts leads to higher compensation due to the fact that higher coup d'etat menace can increase the likelinesss of a house losing its specific human capital or compensation deferral. This so oblige manages to bespeak for higher rewards to counterpoise the high hazards. ( Agrawal and Knoeber ( 1998 ) .Following the study that was carried out by Agrawal and Knoebe ( 1998 ) on 450 companies which were divided in to two, ( one set where directors see both effects of hazard and competition and the other set where troughs faced merely the consequence of competition in the market ) .According Agrawal and knoeber ( 1998 ) , the both effects are of import. everything being equal, through the consequence of competition, lower coup d'etat menace consequence to higher rewards which is in harmoniousness with the point of view of misalignment of stockholders involvement and troughs involvement.3.3.2 Conflict on variegation and wealth reduction investingAnother chief of struggle between stockholders and troughs is on the variegation schemes. There are theoretical claims that variegation have both costs and benefits to houses proprietors, nevertheless, bing cogent evidence suggest that the costs are more than the benefits. there is the averment that holds that, on an averages footing, variegation costs are far higher than the benefits, Morck, Shleifer and Vishny ( 1990a ; Bhagat, shleifer and Vishny ( 1990 ) servaes ( 1996 ) all found out that corporate variegation is associated with significant value loss. Some cogent evidence of bureau jobs can be found in acquisitions and investings. Several surveies have reveals that purchaser return from the announcement of acquisition are negative ( Roll, 1986 ) .According to Jensen ( 1986 ) the nastiest bureau jobs arise in companies with hapless investing gaps and excess cash.it was argued by lang, stulz and walking ( 1991 ) that buyer returns are likely to be lower when companies have small Tobin Qs and greater hard currency flows. On the other manus, McConnell and Muscarella found cogent evidence of wealth cut downing investing in oil geographic expedition, this is particularly when troughs holds small ownership bets ( Lewellen, Loderer and Rosenfeld ( 1985 ) .3.4 The stewardship theoryThe stewardship theory holds a different attack from that of the bureau theory, it foremost premiss is that, the company serves a big scope of societal intents instead than merely seeking to maximise the wealth of stockholders. The stewardship theory besides cal led the stakeholders theory assumes that corporations are societal entities that affect stakeholders welfare and stakeholders are persons interacting with the houses straight, hence, they can impact or affected by the accomplishment of the house ‘s aims ( Donaldson and preston,1995, freeman,1984 ) Harmonizing to Starik and Rands ( 1995 ) , a company ‘s success can be judge by its ability to add stakeholders value ( starik and rands,1995, Dunphy et al,2003 ) .stakeholders will merely return to a house for more when they ever get what they wantFreeman,1984, freeman and Mc Vea,2001 ) .Hence stakeholders are regarded as instrumental to corporate success and they tend to possess some moral and legal rights ( Donaldson and Preston,1995, Ulrich,2008 ) .Companies direction have to take in to consideration the claims or concern of stakeholders in their determination devising procedure ( Blair, 1995 ) , stakeholders participation in the company ‘s determination devising procedure heighten better efficiency ( Turnbull,1994 ) and besides reduces struggles ( Rothman and Friedman, 2001 ) . A company can utilize two attacks when sing or integrating stakeholders in their determination devising ( kaptein and van Tulder,2003 ) . These two attacks are reactive and proactive attack. Reactive attack on one manus is when the concern of stakeholders are non considered or integrated in doing corporate determination. This normally leads to misalignment of the company ‘s aims and the demands of stakeholders ( Mackenzie,2007 ) .The dirts of universe com was attributed to the fact that they ne'er integrated the stakeholder concern in their determination devising procedures ( Curral and Epstem,2003, Turnbull,2002, walkins,2003 and Zandstra,2002 ) .In respond to these dirts, some ordinances were set up by authoritiess with the purpose of alining stakeholders involvement with corporate aims. For case, the Sarbanes-Oxley Act. On the other manus, the proactive attack is when companies integrate the concern of stakeholders in their corporate determination doing procedure, therefore establishes a good corporate administration construction ( de humor et Al, 2006 ) .3.5 Summary of the theories.The cognition of bureau theory can be credited to Coase ( 1937 ) nevertheless the thoughts of this theory was practical merely to managers and boards since the 1980's.Following. bureau theory, persons are self-interested and non selfless, therefore persons can ne'er be trusted to ever move in others best involvement. On the other manus, , persons will ever desire to maximise their public-service corporations maps, the bureau theory considered directors and stockholders relationship as a contract ( Adams, 2002 ) . This means that directors actions must be decently monitored to vouch that they ever act in stockholders ‘ best involvement. The stewardship theory on its portion opted that company ‘s board of managers and their Chief executive officer, moving as stewards, are encouraged to move in the company ‘s best involvements and non seeking to fulfill their selfish involvements. This is partially because, antecedently senior executives regarded companies as an extension of themselves ( Clarke, 2004 ; Wheelen & A ; Hunger, 2002 ) .The stewardship theory hence suggested that, like stockholders, top direction of a company should care more on the future success of the company ( Mallin, 2004 ) .Chapter 44.1 Corporate Governance issues in Developing Countries ( Cameroon )Harmonizing to Wallace ( 1990 ) , developing states are defined as those states found in mid-stream of development and are referred to anamorphous and heterogenous group of states found largely in Africa, Asia, Latin America, Middle East and Oceanea. There exist difference between developed and developing states in footings of civilization, po litical relations and market economic sciences ( Waweru and Uliana,2005 ) .Due to miss in skilled human resources, developing states hence find it hard to pull forces ‘s poetry with accounting and fiscal accomplishments in their commissions. The cultural fluctuation between extremely individualistic states ( like North America ) and extremely collectivized states ( like Africa ) necessitate different corporate administration agreements. Rabelo and Vasconcelos ( 2002 ) pointed out factors like economic tendencies towards globalisation, under developed capital market every bit good as authorities intercession has made the theoretical account of corporate administration to differ from those in European states and North America. Mensah ( 2002 ) argued that states in Africa are non good equipped in implementing the sort of corporate administration found in the western universe because of the economic and political governments qualifying these states ( illustration weak deceitful le gal and judicial governments, province ownership of companies as good limited capacity in skilled human resources. ) . Corporate administration constructions in less develop states are determined by the ardor to keep control by the bulk stockholders over houses, the dependant on debt finance, weak fiscal markets and uneffective legal system ( Rabelo and Vasconcelos,2002 ) .Developing states are ever confronted with jobs like less developed and illiquid capital markets, economic uncertainnesss, investors protection every bit good as weak legal and judicial control system ( Tsamenyi et al,2007 ) . Harmonizing to Goddard and Masters ( 2000 ) , audit commissions has become more relevant and prevailing recently but nevertheless there is dearth in the empirical research about their value. Kalbers and fogarty ( 1993 ) further indicated that the issue of whether audit commissions are truly dispatching their relevancy duty remain insufficiently understood, proposing therefore the demand to analyze the ways audit commissions are runing in developing states like Cameroon In Cameroon, most companies are owned by establishments and such establishments are owned by the province ( authorities ) , hence most board members are functioning the place as direction of stockholders non because of their making neither their experiences ( Mensah,2002 ) .Audit commissions operations in developing states are different compared with the patterns in developed states.In 2001, the Cameroon capital market authorization gave guidelines sing corporate administration activities for listed companies.one of this guideline was that which called all boards to organize audit commissions consisting at least three independent non-executive managers. Figure 2, corporate administration ( CG ) fram work in Cameroon4.2 The legal and Regulatory Framework of corporate administration for listed companies in CameroonCameroon operates under two systems of Torahs viz. ; the common jurisprudence and the civil jurisprudence. The bilingu

Developing Reflective Practice Essay

This essay will focus on developing reflective practice through exploring a critical incident in the workplace. It will explore different methods of reflection and use one particular method to reflect on the critical incident (appendix 1) and explain why this individual method was chosen. It will evaluate individual career development by reviewing past practice and the skills that have been gained throughout time, for example teamwork, group roles and experience gained, which will be ways to measure how development has progressed. It will illustrate a critical understanding of assessing personal capability within the workplace. It will identify a range of personal and interpersonal skills that contribute to effective professional practice and different types of work methods and will also reflect on practice and develop action plans to meet personal goals for the future. It is important to reflect on practice to help us grow as people, find faults and work on issues to better ourselve s. Wigens (2003:1) states ‘reflective practice has been identified as one of the key ways in which we can learn from our experiences’, however Atherton (2003) cited in Johnston and Nahmad-Williams (2009:367) ‘questions whether reflection can really bring together the practical and theoretical’. Paige- Smith and Craft (2008) puts forward that it is important to reflect on how we interact with children and observe their peer interactions; this helps us to reflect on how important interactions are. After looking at Different methods of reflection, I investigated and considered a few, for example Gibbs and Kolbs. Gibbs is quite similar to De Bono’s as you are able to explore the different stages in depth, but found that Kolbs does not have a clear cut off between each phase of the cycle, therefore I found it difficult to pull the case study apart using this method. Johnston and Nahmad-Williams (2009:365) writes ‘Although Kolbs model is useful to see wh ere reflection fits into the learning cycle, it does not provide detail about what reflection is and the processes in which it is achieved’ The model of reflection that has been chosen is De Bono’s six thinking hats. This method struck to be the most interesting to myself as it can be quite a visual tool. The hats are referred to by their colour at all times as opposed to their function (De Bono 2000), the reason for this is as De Bono (2000:14) states ‘If you ask someone to give his or her emotional reaction to something, you are unlikely to get an honest answer because people think it is wrong to be emotional’.  Lindon (2012) puts forward that De Bono’s method is a parallel way of thinking, meaning that you are looking and thinking in the same direction yet the direction changes. It helps to give a more rounded viewpoint and helps see things from a different perspective. Dreyer (2012) illustrates this by imagining a house with four people around it, one facing the front, one facing the back and one at either side; All may argue that their viewpoint is the best, but until you walk around and view the house from all four angles you will not be able to have an understanding of different perspectives. Johnston and Nahmad-Williams (2009:365) state that ‘Dewey (1859-1952) was an influential figure in education and viewed reflection as a way of purposeful thinking that is systematic and raises questions and answers’. De Bono (2000) suggests that thinking is imperative in everyday life and no matter how good we think we are we should always strive to be better. De Bono’s six hat model has six aspects the first being the white hat which suggests that you first examine the data you have available, the facts and the figures, in this case Child L’s mum wants to be able to bring her child into nursery earlier than 8:00am as she has to be in work, but thinks it is too expensive to pay for the early sessions, after being told to not come in early, mum still persisted in arriving prior to 8:00am. The second aspect is the red hat which is your intuition, emotions and reaction, in this case feelings were frustration that mum did not want to pay like others, annoyed that she was ignoring me, aggravated she kept bringing child L early, infuriated at the fact that she was not communicating with staff, uncooperative as did not want to help mum and nervous to keep having to tell her repetitively. The third aspect is the black hat which is the negative points of the situation, De Bono (2000) states that this is the most valuable of all of the hats and should not be seen as a bad hat, it is only to highlight possible risks and potential problems, in this case it is unfair to parents that are paying for the early start and not fair on staff members setting the room up. The fourth aspect is the yellow hat which is the positive aspects of the situation, in this case it is good for parents to test staff members patience as it helps deal with things in future calmly and confidently, having gained knowledge and experience, also that the manager and parent were able to meet half way and come to a conclusion of a joint decision. The fifth aspect is the green hat which summarises and  concludes of events, helping to decide what has been learned and what you will take forward into future practice. In this case it has shown that parents are going to get upset at times and practitioners have to deal with it as effective as possible. In future I would try and resolve the situation myself by coming to a resolution without involving the manager if possible, this way it may have not escalated as quickly as it did. The final aspect is the blue hat which is the evaluation to put the green hat into action. In this case make sure there are parent comment boxes wher e if a parent is unhappy they are able to voice their opinion and feel listened to instead of getting worked up. If it is possible to find an alternative and affordable way to engage struggling parents for example to be able to drop their child off early maybe just five minutes. You may then imagine you were the complete opposite and ask yourself how you would now feel. By going through these different thought processes you are allowing your brain to take a journey to come to a fair conclusion. Having worked through the above reflective model it has highlighted some personal strengths and weaknesses which have been useful to reflect on professional development. Writing a timeline of career progression (appendix 2) has enabled me to look at past practice and focus on the skills gained throughout years of training. This has been a useful method of looking at personal progression. The most enjoyable experience had to be when I worked in Majorca as a children’s representative. Whilst here learnt to tone down my expressive personality, after a hurricane struck I panicked and scared the holiday makers, my manager pulled me into the office and explained that it was very unprofessional and that I needed to control my emotions. Another experience was after returning home, a family that used to attend my previous nursery had informed me of some very upsetting news. They told me that the mother of a 1 month old baby had died. The father asked if I would be interested in becoming their private nanny, after working on the other side of child care in a home environment I was able to see things from a different perspective and can relate to parents in current practice. Many times in life the opportunity have arisen for me to develop and grow as a practitioner. Since being a child my career path has been quite clear and after leaving school I began to study child care, alongside working with children. Looking back it was quite a vulnerable decision as the importance o f childcare was not as  great as now, and after working in several nurseries, learnt that it is hard work. The chance finally came for a promotion to be third in charge of a nursery, after being successful in the position I realised that it was going to be a difficult journey. The job was very rewarding, although the time spent with the children had been halved due to paperwork and other duties, and other practitioners that used to work alongside me were now taking instructions from me. Through this time I began to deal with confrontation, at first the thought was quite daunting but after lots of practice feel very comfortable to approach this. The next step in my career development was a job that I happen to stumble across. I quickly arranged an interview as the money was greater yet the responsibilities cut. The setting was not like one I have worked in, or heard of before as there were lots of deprived children and chance to delve into the social work side of things. In the past my experience has been in upper class nurseries with highly qualified parents such as Lawyers and Doctors. I quickly learned that this was going to bring me lots of experience and after working there for a year and a half I got promoted to a room leader, this is my current situation and have now been working there for four years. Every day I feel I learn something new in my job role and am one of the few people who love my job. Within my duties I attend core group meetings and case conferences, liaise with social workers and other professionals, as well as support the staff in my room with their daily duties and most importantly care for the children within my setting. The team we have is a highly qualified group of people who have all worked there for a long time and enjoy working together. Each staff member has a different personality which helps the nursery see things from different perspectives. Miller (2005) proposes that teams get together by different personalities balancing out so everybody has an input. I have a very bubbly and confident personality yet a colleague of mine is qui te the opposite. It is this balance that helps the staff and parents to feel comfortable and be able to approach individual members of the team with ease to support their personal preference. Manktelow (1995) illustrates you are able to solve different problems using numerous approaches such as ambition, sensitivity, creativity etc. As staff we are able to approach difficulties within our working hours and overcome them giving each other great support. Like Lindon (2012) we work effectively as a team even though there is a hierarchy  everyone is allowed to have their own opinion and are listened to which helps everybody feel positive. All members of the team enjoy attending regular training courses to make sure we are up to date with current practice and procedures. Miller (2005) puts forward that it is important for practitioners to take a critical look at theory and practice when working with children. Regular staff meetings are held and staff appraisals. It is important to be able to give and receive constructive criticism. I recently have started to give the 4 practitioners underneath me appraisals. I find it to be quite difficult to explain that they need to work o n different parts of their practice. This is an area that I need to work on. The praise sandwich is a tactic that my manager explained to me, when you have something negative that you need to discuss with a member of the team, you should start and end by saying something positive. This helps the person to realise that they are acknowledged for the good practice as well as the bad. She also told me to be more of a ‘Swan’ which was explained to me like this. A swan is a beautiful creature who is relaxed above water, however below the water her feet are going very fast. My manager explained for me to stay calm on the outside in situations even if underneath I am struggling. After researching more about this found a good self reflection tool called SWAN. Jagusiak (2013) writes that it stands for Strength, Weakness, Ambition and Need. She explains that it involves witnessing and examining one’s own practice, although you are watching someone else, this will help to analyse and critique any weaknesses. I am proud to be part of the team and feel that we are at the performing stage in our career. Tuckman (1965) cited by Smith (2005) argues that when groups of people come together they go through four separate stages as they meet and establish. These phases are called forming, storming, norming and performing. Forming is when the people in the group are meeting and accepting each other, they tend to test boundaries and figure interpersonal behaviours out. Storming is when they are a bit more comfortable and are able to speak out, question and criti cize one another, they feel more comfortable to form conflict. Norming is when the group is established, they have overcome resistance and able to express personal opinions. Performing is the fourth stage where a team work well together, almost complement each other and help one another, roles are well established and performance is high. This is where my team are at the moment. Tuckman later in 1977 proposed an update and added a fifth phase adjourning. This is the stage where tasks are complete, people go their separate ways and group members can disengage. This can be due to retirement or the setting closes. After conducting some individual experiments to see how I work and how I fit into my team, I found that an auditory learning style suits best as the spoken word seems to digest better personally. The Belbin Team Inventory test showed that the implementer stuck out from the rest. I find this to be true as am a very positive person and am motivated and self disciplined. My favourite questionnaire had to be the Honey and Mumford’s learning style. After completing this it was found to be quite evenly distributed between all of the aspects, which are the activist, the theorist, the pragmatist and the reflector. My scores were slightly higher in reflector and pragmatist. I am in agreement with this as am very enthusiastic about trying new things out in practice, yet able to stand back and view the whole picture before jumping in head first. Lindon (2012) writes once we have highlighted our preferred learning style using many questionnaires there are a number of ways to put these into practice. Completing these self-reflection tests has enabled me to understand more about the person that I am, how I work and what I need to strive to achieve in the near future. Taking this into consideration I have planned for some future development. I thought it would be useful to look at the early year’s standards and aim to develop some aspects of these. With this in mind I have chosen 2.5 Develop and sustain respectful relationships with children and their families. I have chosen this one linking back to my critical incident. It is important to sustain respectful relationships with parents as you have to work in partnership with them on a daily basis. Through these professional relationships comes trust allowing us to fulfil our parents as partner’s ethos. The second aspect I would like to develop is 7.2 take a lead in establishing and sustaining a culture of cooperative working between colleagues and wider professionals. I have chosen this one due to the fact I actively engage with outside agencies and other professionals on a daily basis and would like to make sure that I am continuing this cooperative behaviour. In conclusion I feel that I am a very reflective person. I enjoy receiving constructive criticism, as I like to have goals to work towards and always strive to better myself. I have enjoyed completing this essay as it has highlighted many things about myself I had forgotten along the way, such as how I used to behave and react to problems. By illustrating this it has stated the fact that without knowing I have been learning and developing from the start. I have discovered ways for me and my team to find out more about how we work as practitioners and ways to overcome certain situations like my critical incident. I am proud of my personal achievement and would encourage anyone to work with children as it is a very rewarding path in life. Dreyer, L Arts Forward, Munch Club #1: Edward deBono’s Six Thinking Hats Sep 10th 2012; http://artsfwd.org/munch-club-1-edward-debonos-six-thinking-hats/ On-Line-UK [Accessed 20.11.13] De Bono, E (2000) Six Thinking Hats, Penguin Books; Great Britain Jagusiak, C (2013)SWAN technique; http://www.satyaliveyoga.com.au/2013/04/16/swan-technique/ On-Line-UK[Accessed 10.12.13] Johnston, J and Nahmad- Williams (2009) Early Childhood Studies, Pearson Education Ltd; England Lindon, J (2012) Reflective Practice and Early Years Professionalism, 2nd edition, Bookpoint LTD; Oxon Manktelow, J (1995) Mind Tools Essential Skills for an excellent career, Mind Tools, UK; Blackwell Miller, L (2005) Developing Early Years Practice, Oxon; David Fulton Publishers Paige-Smith, A and Craft, A (2008) Developing Reflective Practice in the Early Years, Berkshire; Open University Press Reed, M and Natalie, C (2010) Reflective Practice in the Early Years, SAGE Publications LTD; London Smith, M. K. (2005). ‘Bruce W. Tuckman – forming, storming, norming and performing in groups, the encyclopedia of informal education. [http://infed.org/mobi/bruce-w-tuckman-forming-storming-norming-and-performing-in-groups/. Accessed: [02.12.13]. Wigens, L (2003) Beginning Reflective Practice, Cheltenham; Nelson thornes Ltd

Marie Curie †Change Agent Essay

Marie Curie has been chosen as a change agent due to the fact that she was the first woman to win a Nobel prize. She studied radioactivity, â€Å"a term which she invented,† (1) and invented portable x-ray machines which were carried by vans to the wounded in the field during World War I. (2) Element 96 was named curium (Cm) in the honor of Pierre and Marie Curie. (3) She made important advancements in the area of science, as remembered by the Curie institute, which for a time she was director of. The institute was named for her because of all the advancements she had made during her studies, and the work she did at the institute itself. The change that she made was for education for women to be accepted, and for women working in science to be more acceptable in her time. Works Cited (1) http://www.lucidcafe.com/library/95nov/curie.html (2) http://www.diplomatie.gov.fr/label_france/ENGLISH/SCIENCES/CURIE/marie.htm (3) http://www.student-consolidation.net/nobel-prize-winners/curie-sklodowska/curie-sklodowska.htm

Research problem Paper Example | Topics and Well Written Essays - 250 words

Problem - Research Paper Example The property in question here does not have any elements related to trade and profit, therefore the owners of the property did not receive any recognized gains. The tax basis for the property under discussion would be such that the owners would be accorded tax-free treatment. Section 1031a of the internal revenue code identifies the basis applicable to a property being exchanged (IRS). The property under discussion here could be treated as tax free because of acquisition within the specified duration of time. The tax basis imposed on properties by the United States tax laws would be excluded in this property. The regulation offers a 45 day period of identification of an exchange property, and 180 day period for acquisition of the property. Since the property under discussion fully complied with these stipulations, the property would receive tax-free treatment. The owners of the new property would not be required to remit any taxes on the new

Political Socialization Essay Example | Topics and Well Written Essays - 750 words - 1

Political Socialization - Essay Example As such, this brief analysis will attempt to weigh and analyze the type of different political socialization experiences that have shaped the way in which this author engages or chooses not to engage in the political arena of our nation. The first of these factors can be traced to the fact that although I consider myself to be a believer, I do not allow my individual belief system to dictate in what way my political faith evolves. Although developmental factors have had a profound effect on the way that I engage with the world, view reality, and perceive key issues, I was fortunate in that my upbringing, to include each of the factors that have been previously listed, did not directly influence the way in which I allow my belief to influence my political views (Diemer 246). Obviously, it is impossible to say categorically that my belief system does not influence my political beliefs due to the fact that this belief system is integrally tied to the individual that I am and the way in which I approach key issues; however, I can say that as compared to many of the individuals I know who are deeply involved in politics, the level to which my belief has socialized me with respect to politics is limited. Likewise, perhaps the most important determinant to the way that I have been politicized is the experiences and formative occurrences which were a result of my childhood and the way in which my parents raised me. Although it is difficult to point to a specific example of how it took place, it is not difficult to say that due to the values and morality that my parents sought to pass on to their children, it deeply affected the way I have come to identify with politics and specifically key political issues. In this way, I would say that this socialization determinant is perhaps the most important of all (Pels et al 312). Due to the act that I have always retained a close relationship with my family, the value system which they passed on to me has remained largely intac t with respect to the way I have developed my own political thought process. In much the same vein, I consider the education that I have received to be one of the main factors that have served to socialize my interpretation of politics. Due to the fact that education helps individuals to open their world view and consider aspects of topics that they would otherwise not consider, my educational experience has served to open up topics that the other forms of political socialization I have experienced up until this point have not. It is worth noting that although one cannot consider one aspect of their upbringing and experience as necessarily more powerful than another, I would consider education to be the one factor that is perhaps even more powerful than the world-views and values that were given me by my parents. This is at least partly due to the fact that as a young person I was inspired to question my surroundings and not take things for granted. In this way, due to the fact that I grew up in a household that prided itself in freedom of thought and of expression, I was encouraged from an early age to explore and formulate my own ideas. Although all of these factors have helped to develop the way I engage in the political process, there is of course a final fact that has not been considered (Skhavat 197). This factor revolves around the previous experiences I have had and noted with regards to the political process. Oftentimes I have been told by peers and professors alike that my political views are â€Å"too jaded† for someone of my age. However, due to the fact of the experience that I have witnessed with regards to a litany of

Information and System Security Essay Example | Topics and Well Written Essays - 500 words

Information and System Security - Essay Example Information security is concerned with the confidentiality, integrity and availability of data regardless of the form the data may take: electronic, print, or other forms. The field of information security has grown and evolved significantly in recent years. As a career choice there are many ways of gaining entry into the field. It offers many areas for specialization including Information Systems Auditing, Business Continuity Planning. Information security is the ongoing process of exercising due care and due diligence to protect information, and information systems, from unauthorized access, use, disclosure, destruction, modification, or disruption. The never ending process of information security involves ongoing training, assessment, protection, monitoring & detection, incident response & repair, documentation, and review. In recent years identity management has become increasingly important, especially in the financial services, healthcare and government industries. Why identity management has emerged as a growing business and IT priority is no mystery. Obvious drivers include the need to protect one's intellectual property, data brand value and customer loyalty from the potential damage wrought by electronically-based fraud and theft; the desire to cut technical support costs, increase productivity through self-service and enable integration across disparate platforms.

Six Sigma Approach Essay Example | Topics and Well Written Essays - 4000 words

Six Sigma Approach - Essay Example After picking the low-hanging fruit, they will find themselves in need of a broader and more robust approach. Subsuming six sigma beneath the process-management umbrella addresses those challenges and allows companies to reap its substantial benefits while keeping it away from areas where it won't work. Because process management entails major changes to virtually all management systems, it demands absolute commitment from executives. IT Companies that rise to the challenge will garner extraordinary rewards: not just cost savings, but accelerated new-software introduction, major improvements in client satisfaction and sharp increases in profitability. For those not familiar with Six Sigma, it is first and foremost a philosophical approach that demands the effective use of data to analyze business issues. Key decisions about business activities now beg the question, "How does the available data support that decision" Whether the decision is a make-buy decision, a product change question, a new-model introduction question, or a manufacturing-process decision, the decision on how to proceed is dependent on the available data. Six Sigma is a measurement. ... the decision is a make-buy decision, a product change question, a new-model introduction question, or a manufacturing-process decision, the decision on how to proceed is dependent on the available data. Six Sigma is a measurement. A more illustrative explanation can be found in a 1997 letter Welch sent to GE stockholders: "The Six Sigma quality initiative, very briefly, means going from approximately 3S,000 defects per million operations, which is average for most companies, including GE, to fewer than 4 defects per million in every element in every process that this company engages in every day." (Pande, P.S., et al. 2000) GE was not the first large corporation to undertake the Six Sigma discipline. In the ten years prior to 1995, a number of companies began Six Sigma: Motorola, Texas Instruments, Eastman Kodak, and Allied Signal. Their discoveries and successes were well documented. When embarking on their own process, GE adopted many of the concepts and disciplines of Motorola's Six Sigma methodology. (Pande, P.S., et al. 2000; Harry & Schroeder 2002) Motorola's involvement with Six Sigma began in 1982, when it implemented a quality-improvement program that later became known as Six Sigma. Motorola's CEO asked corporate managers to cut quality costs in half that year. He repeated the charge in 1983. By 1984, the cost-reduction efforts were beginning to point to the need for improved analytical methods and product design for continued process improvement-and the Six Sigma discipline answered this need. (Pande, P.S., et al. 2000; Harry & Schroeder 2002) Motorola's emphasis was on designing for Six Sigma quality, and a number of advanced quality tools were used. Because effective application of these tools was essential, Motorola developed its extensive Six Sigma

Unit 10 Essay Example | Topics and Well Written Essays - 250 words

Unit 10 - Essay Example What I’ve learned from discussions and collaborations with fellow students is that there are a lot of people concerned with the justice in not only the United States, but also other areas of the globe. Latin America is a region which has exploding growth in the number of cases available to take on, and many of my fellow classmates are looking to capitalize on that fact. According to Fierro (2003), â€Å"Generally speaking, the evidence on growing caseloads and their consequences in Latin American countries is more fragmentary than in the United States or Western Europe† (pp. 11). I realize I can use the knowledge I’ve gained in this course in order to inform my legal studies. Strengths and opportunities that I see on the horizon come from having fully participated in and having given 100% effort to the causes that my classmates and I feel are most core to our values as future professionals in the legal field. I definitely have questions and concerns about the future in what I have been studying, but I try to limit those inquiries to realms of knowledge that I can control. I would like to continue studying all kinds of law, possibly with a focus on international law, criminal law, trial advocacy, and litigation. There are several elements which have made taking this course worthwhile, but the ones that have made it the most rewarding include learning, improving, growing, studying, and exploring my varying topics in legal

Economic issue Essay Example | Topics and Well Written Essays - 250 words - 2

Economic issue - Essay Example The progressive widening of this gap occasions the government to take an active role in addressing emerging issues in that regard. Wealth concentration to a few people while the rest of the population battles poverty and middle class-related social and economic issues only worsens the state of the larger economy. In this respect, it is important to review the minimum upwards. Finally yet importantly, putting more money into people’s pockets will ultimately improve life standards in diverse and dynamic ways. More people across America will realize improved purchasing power, consumption of goods and services will increase, and reliance on unemployment benefits will reduce as more people enter the job market. Even though minimum wage debates have proven to be contentious, it is important to consider individual and/or household benefits that an increase in minimum wage will provide to the American population. Morath, Eric. White House: State, Local Minimum-Wage Efforts to Help 7 Million Workers. The Wall Street Journal, Aug. 12, 2014. Web. 15 Sept. 2014.

Stoneridge Investment Partners LLC v. Scientific Atlanta Essay

Stoneridge Investment Partners LLC v. Scientific Atlanta - Essay Example The court in its analysis of the facts in the case, the court asserted that the claims against the plaintiffs were based on aiding and abetting and not on manipulation or deception. There was no allegation of involvement of the vendors in any of the charters deception since they were not involved in internal accounting (Hein et al. 25-32). The vendors were deemed to have been involved in a business transaction, which did not involve securities and were such under no obligation to take any action on the financial happenings of the charter company. The court was right in not revisiting the 1994 Central Bank aiding and abetting standard, which created primary and secondary liability. The ruling in the 1994 case of Central Bank of Denver v. the First Interstate Bank of Denver, which held, that aiders and abettors were liable to scheme liability in instances in which their actions resulted in financial losses and manipulative tendencies (Perry and Scott 26-32). Revisiting the case and cre ating scheme liability would not have been practical as even the 1994 case strictly applied the rule of section 10 (b) were not envisioned to include aiders and abettors. ... The law would also result to an increase in the number of cases filed against secondary violators of the SEC Act; the act would deter and lead to a shift of many foreign investors from the country due to the high risks and costs involved. The positive effects of such a ruling on the business community would be its effect on the accounting principles and general way of doing business. Such a ruling would make many businesses to be more careful in their business dealings even in secondary transactions (Coberly 26-7). Since the rule would make secondary violators liable, it would result into more vigilance among businesses that would result to better management and more profits for the business. The question of whether there was aiding and abetting in the Stoneridge Investment Partners LLC v. Scientific-Atlanta, Inc case is a complex issue which is subject to different interpretations. In my opinion, the defendants cannot be said to have been involved in aiding and abetting since what t hey were involved in was a secondary business transaction to what is proscribed as aiding and abetting in section 10 (b). Aiding and abetting would entail intent to collude in order to deceive and manipulate people into buying of securities. The defendants in this case were not involved in any collusion since theirs was simply a business transaction separated from the selling of securities. The behavior of the vendors while legal under the law since it adheres to general accounting principles is unethical in that it was unethical. Professional conduct in business calls for an adherence to ethical principles in all aspects of doing business. The vendors acted in an unethical manner since they had knowledge of the unethical financial reporting that the charter was involved in yet they

Tesco in India Essay Example | Topics and Well Written Essays - 2000 words - 7

Tesco in India - Essay Example The various segments of this research paper comprise a brief study of cross-cultural management, impact of cultural diversity on international firms and a relevant analysis of cross-cultural scenario related to TESCO’s store location, possible conflicts and methods of resolving. In the contemporary business world where every organisation wants a global presence, cultural variation is no more a new aspect. Cultural diversity in terms of behaviour, language and communication is observed in different areas of management (Kottak, 2011). This cultural variation stems from the involvement of employees with different cultural backgrounds (Triandis, 2001). Multi-national companies are currently expanding to as many countries as possible and this has brought cultural differences in the workplace (Chevrier, 2003). For a management to operate successfully, it is necessary that the workforce interact with each other without considering background, religion, cultural and linguistic differences. This is why a number of multi-national companies with workers from different parts of the world are working successfully in Middle East and western countries (Kawar, 2012). However, there are examples of failure of multi-national companies such as, Nestle, who was unsuccessful to sell baby food in impoverished market of Africa because their assumptions went wrong (HSBC, 2012). To understand the concept of cross-cultural approach, it is important to understand the term ‘culture’. One’s culture is inculcated since childhood as a result of influence from parents, family members, teachers, playmates and neighbourhoods (Harrison and Huntington, 2000). Culture is an integration of values, tradition, ethics, language, religion, life style and verbal and non-verbal expressions. It conditions one’s intellect and behaviour pattern. Culture is classified as generic culture and local culture. While local culture is a set of