Corporate governance and audit Coursework Example | Topics and Well Written Essays - 2250 words

Corporate governance and audit - Coursework Example Therefore the government decides to reduce this theory for minimizing the problem of principal agent and also reducing the direct and indirect cost involved for ensuring that the agents behave in accordance with the principles. The report that has been established by the UK committees of corporate governance includes the stakeholder theory that not only generates the wealth of the shareholders but also takes into consideration a wide group of stakeholders. The transaction cost theory that not only emphasizes on the wealth of the shareholders but effective accomplishment of the transactions. a) The scandals of the corporate governance in the light of UK regulatory development can be explained as it facilitates innovation in which it allows the companies to implement new ideas, avoiding of box ticking in which the companies are allowed to complying with the principles and proportionality and long term learning for adopting cultural change in the companies for fulfilling the objectives and principles of corporate governance. b) The main objectives of OECD code of the corporate governance are to improve the institutional, legal and national framework required for the corporate governance. It focuses on improving the growth and development of the companies. The underlying principles of the OECD code of corporate governance are that it serves on the basis of the OECD and non OECD countries of the world. The principles mainly focus on the stock market listed companies that will contribute towards improving the corporate governance of the private companies. The principles deal with the transparent market, efficient market and also well regulated market. The main objective of the shareholder theory is maximization of wealth of the shareholders. The shareholder theory is subjected to minimum regulatory and government intervention in the business operation.