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Research outline

1. Introduction
2. Literature review
2.1.Definitions of corporate governance
2.2.Principles of corporate governance
2.3.Corporate governance mechanism
2.4.Different approaches of corporate governance
2.4.1. Agency theory
2.4.2. Social responsibility
2.4.3. Stewardship theory
2.5.Advantages and disadvantages of corporate governance
2.6. Audit committee
3. Case study


Corporate governance is a system through which organizations manage and exercise

control over it. Corporate governance structure specifies the distribution of rights and
responsibilities among different participants in the corporation, such as the board,
managers, shareholders and other stakeholders and lays down rules and procedures for
decision-making on corporate issues. This also provides the structure through which
the established business objectives of the company, as well as the means to achieve
these objectives and control efficiency. Also, corporate governance is defined as a set
of mechanisms through which the company operates, when ownership is separated
from management.

Today, almost can not talk about a successful and efficient company that is not
applicable and not improving standards of corporate governance. Empirical research,
which analyzed the association between corporate governance and business
efficiency, shows that companies that have implemented standards of corporate
governance perform better than companies that do not. The implementation of
corporate governance standards and the development of appropriate and applicable
mechanisms of control and management, to overcome the agency problem, improve
the organizational structure and better functioning of the entire decision-making
process. Corporate governance has a direct impact on the financial market and the
possibilities of company financing, primarily through capital markets. Without
adequate mechanisms of corporate governance reduces the possibility of attracting
investor, which severely limits development opportunities corporations.

Corporate governance is an area where the main object of study relations within
management structure of a corporation. Corporations have become indispensable
participant contemporary market, and within corporations themselves are control
structures that differ from corporation to corporation. "Successful companies in their
operations have effective corporate governance, because according to Coase (1991)
without an effective management system created chaos in human relationships
"(Tipuric, 2008). In this part of the research begin to define the very concept of
corporate governance and its main features. Then shall specify areas of corporate
governance, mechanisms and a code of corporate governance.

In the second part of the research shows the audit is an integral part of the financial
operations of economic entities. It implies authenticity and accuracy of financial
statements, In this section will cover application of corporate governance in preparing
financial statements and participating in auditing.