POLYTECHNIC UNIVERSITY OF THE PHILIPPINES

COLLEGE OF ACCOUNTANCY AND FINANCE

DEPARTMENT OF ACCOUNTANCY

COURSE TITLE GOVERNANCE, BUSINESS ETHICS, RISKS MANAGEMENT AND INTERNAL CONTROL
COURSE CODE ACCO 20163
CREDIT UNITS 3 UNITS
COURSE PREREQUISITE ACCO 20083, ACCO 20093, ACCO 20103, ACCO 20113, LAW 20023, ACCO 30013, ACCO 20123, ACCO 20133, ACCO 20143, BUMA 20093
COURSE DESCRIPTION This course is designed to prepare students to become professionals who can provide value to the organization and who serve as the catalyst for improving organization governance, risk management, and
internal control.

Institutional Learning Outcomes Program Outcomes Course Outcomes

1. Creative and Critical Thinking A graduate of Bachelor of Science in Accountancy At the end of the semester, students are expected to:
Graduates use their imaginative as well as a rational thinking abilities to life situations in order push boundaries, realize should be able to:
possibilities, and deepen their interdisciplinary and general understanding of the world. a. Possess current knowledge of professional standards
2. Effective Communication a. Demonstrate working knowledge in the that are expected from a professional accountant and
Graduates are proficient in the four macro skills in communication (reading, writing, listening, and speaking) and are areas of financial accounting and demonstrate appropriate use;
able to use these skills in solving problems. Making decisions, and articulating thoughts when engaging with people reporting, cost accounting and cost
in various circumstances. management, management accounting, b. Demonstrate knowledge of corporate governance,
3. Strong Service Orientation auditing, accounting information systems risk management, and internal control;
Graduates exemplify the potentialities of an efficient, well-rounded and responsible professional deeply committed to and accounting research.
service excellence.
c. Apply knowledge in business acumen, IT, and
b. Demonstrate self-confidence in management needed for internal auditing;
4. Community Engagement
performing functions as a professional
Graduates take an active role in the promotion and fulfillment of various advocacies (educational, social and
accountant. d. Be able to apply tools and technique to evaluate risks
environmental) for the advancement of community welfare.
and internal controls;
5. Adeptness in the Responsible Use of Technology
c. Employ technology as a business tool in
Graduates demonstrate optimized use of digital learning abilities, including technical and numerical skills. capturing financial and non-financial e. Be able to perform an audit engagement with minimal
6. Passion to Lifelong Learning information, preparing reports and supervision in conformance with acceptable
Graduates are enabled to perform and function in the society by taking responsibility in their quest to know more about making decisions. professional standards;
the world through lifelong learning.
7. High Level of Leadership and Organizational Skills d. Apply acquired knowledge and skills to
Graduates are developed to become the best professionals in their respective disciplines by manifesting the appropriate pass professional licensure/certification
skills and leaderships qualities. examinations
8. Sense of Personal and Professional Ethics
Graduates show desirable attitudes and behavior either in their personal and professional circumstances. e. Appraise ethical problems/issues in
9. Sense of National and Global Responsiveness practical business and accounting
Graduates’ deep sense of national compliments the need to live in a global village where one’s culture and other people situations and recommend appropriate
culture are respected. course of action that adheres to the
professional code of ethics.

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Course Plan
Week Topic Learning Outcomes Methodology Resources Assessment
Overview: Internal Auditing After thorough discussion of the topics, the learner will be able Lecture/Discussion The IIA’s International Standards for the Professional Module 1
a. Foundations of Internal Auditing to: Practice of Internal Auditing Standards (ISPPIA)
b. Independence and Objectivity 1. Interpret The IIA's Mission of Internal Audit PPT presentation
c. Quality Assurance and Improvement and the principles-based, mandatory IIA’s Code of Ethics
Program requirements which are essentials in the Recitation
d. Governance, Risk Management, and Control conduct of internal audit activity; Any foreign authored book in auditing;
e. Fraud Risks 2. Distinguish assurance and consulting services Assignment
1 provided by the internal audit activity; e-book in auditing
3. Demonstrate conformance with the IIA Code of Ethics; Group Report
4. Describe the required elements of the quality assurance Any locally authored book in auditing
and improvement program (internal assessments,
external assessments, etc.);
5. Understand the role of internal audit in Governance,
Risk Management, and Internal Control; and
6. Identify elements of Fraud Risk.
1 Definition and Sources of Corporate Governance After thorough discussion of the topics, the learner will be able Lecture/Discussion Cadbury Report Module 2
a. Law to:
b. Codes 1. Define and explain the meaning of corporate PPT presentation SEC Code of Corporate Governance
c. Theories governance;
d. Other Publications 2. Discuss the implications of the separation of ownership Recitation G20/Organization for Economic Co-operation and
and control; Development (OECD) Principles of Corporate Governance
Separation of Ownership and Control 3. Analyze the purposes and objectives of corporate Assignment
a. transaction costs theory governance; Any foreign authored book in Governance
b. corporate legal structure 4. Describe the decision authority and incentives of Group Report
c. board structure shareholders, boards of directors, and top e-book in Governance
d. doctrine of centralized management management;
e. agency problem Any locally authored book in Governance
1 Stakeholders After thorough discussion of the topics, the learner will be able Lecture/Discussion Cadbury Report Module 2
to: PPT presentation
a. Categories, Stakeholder Group, Members 1. Recognize the impact of organizational culture on the SEC Code of Corporate Governance
b. Stockholder theory overall control environment and individual Recitation
c. stakeholder theory engagement risks and controls; G20/Organization for Economic Co-operation and
2. Describe and compare the essentials of rules and Assignment Development (OECD) Principles of Corporate Governance
Underlying principles of Corporate Governance principles-based approaches to corporate governance,
a. Fairness including the comply or explain principle; and Group Report Any foreign authored book in Governance
b. Accountability 3. Explore the objectives, content, and limitation of
c. Transparency various codes of corporate governance intended to e-book in Governance
apply to multiple national jurisdictions.
Guiding Principle of Corporate Governance Any locally authored book in Governance

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2 SEC Code of Corporate Governance
a. Code of Corporate Governance for Publicly
Listed Companies (SEC Memorandum
Circular No. 19, series of 2016)
b. Code of Corporate Governance for Public
Companies and Registered Issuers (SEC
Memorandum Circular No. 24, series of
2019)
Underlying Principles of Good Corporate Governance
a. The board’s governance responsibilities
b. Disclosure and transparency
c. Internal control system and risk
management frameworks
d. Cultivating a synergic relationship with
shareholders/ members
e. Duties to stakeholders
2 The Board’s governance responsibilities
a. Establishing a competent board
b. Establishing clear roles and responsibilities
of the board
c. Establishing board committees
d. Fostering commitment
e. Reinforcing board independence
f. Assessing board performance
g. Strengthening board ethics
2 Disclosure and transparency
a. Enhancing company disclosure policies and
procedures
b. Strengthening the external auditor’s
independence and improving audit quality
c. Increasing focus on non-financial and
sustainability reporting
d. Promoting a comprehensive and cost-
efficient access to relevant information
Internal control system and risk management
frameworks
a. Strengthening the internal control system
and risk management systems
After thorough discussion of the topics, the learner will be able Lecture/Discussion Revised Corporate Code Module 3
to:
1. Explore the objectives, content, and limitations of SEC PPT presentation SEC Code of Corporate Governance
Code of Corporate Governance intended to apply to
domestic corporations; Recitation G20/Organization for Economic Co-operation and
2. Explain the underlying principles adopted by SEC Development (OECD) Principles of Corporate Governance
Code of Corporate Governance towards a more Assignment
effective corporate governance framework; Any foreign authored book in Governance
3. Explain and evaluate the roles and responsibilities of Group Report
those charged with governance, the importance of e-book in Governance
board committees in corporate governance
Any locally authored book in Governance
After thorough discussion of the topics, the learner will be able Lecture/Discussion Revised Corporate Code Module 3
to:
1. Explore the objectives, content, and limitations of SEC PPT presentation SEC Code of Corporate Governance
Code of Corporate Governance intended to apply to
domestic corporations; Recitation G20/Organization for Economic Co-operation and
2. Explain the underlying principles adopted by SEC Development (OECD) Principles of Corporate Governance
Code of Corporate Governance towards a more Assignment
effective corporate governance framework; Any foreign authored book in Governance
3. Explain and evaluate the roles and responsibilities of Group Report
those charged with governance, the importance of e-book in Governance
board committees in corporate governance
Any locally authored book in Governance
After thorough discussion of the topics, the learner will be able Lecture/Discussion Revised Corporate Code Module 3
to:
1. Explore the objectives, content, and limitations of SEC PPT presentation SEC Code of Corporate Governance
Code of Corporate Governance intended to apply to
domestic corporations; Recitation G20/Organization for Economic Co-operation and
2. Explain the underlying principles adopted by SEC Development (OECD) Principles of Corporate Governance
Code of Corporate Governance towards a more Assignment
effective corporate governance framework; Any foreign authored book in Governance
3. Explain and evaluate the roles and responsibilities of Group Report
those charged with governance, the importance of e-book in Governance
board committees in corporate governance
Any locally authored book in Governance
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 Cultivating a synergic relationship with shareholders/
members
a. Promoting shareholder/member rights

Duties to stakeholders
a. Respecting rights of stakeholders and
effective redress for violation of
stakeholder’s rights
b. Encouraging employees’ participation
c. Encouraging sustainability and social
responsibility
2 Business Ethics, Corporate Social, Responsibility and
Sustainability
3 Fundamental Concepts of Risk
a. Risk, Hazard, and Uncertainty
b. Categories of Risks
c. Impact of Risk on Stakeholders
d. Risks Faced by the Organizations
After thorough discussion of the topics, the learner will be able Lecture/Discussion SEC Code of Corporate Governance Module 4
to:
PPT presentation Sustainability Reporting Guidelines for Publicly Listed
1. Define the components of business ethics. Companies (Memorandum Circular No. 4, series of 2019)
2. Formulate ethical decision in business Recitation
3. Understand the concept, applicability, and Any foreign authored book in Business Ethics, CSR, and
reporting in respect to Corporate Social Assignment Sustainability
Responsibility and Sustainability.
4. Explain the concept of corporate citizen and Group Report e-book in Business Ethics, CSR, and Sustainability
intergenerational responsibility.
Any locally authored book in Business Ethics, CSR, and
Sustainability
After thorough discussion of the topics, the learner will be able Lecture/Discussion COSO 2017 Enterprise Risk Management – Integrating with Module 5
to: Strategy and Performance
1. Interpret fundamental concepts of risk and the risk PPT presentation
management process; COSO 2004 Enterprise Risk Management - Integrated
2. Identify and assess the impact on the Recitation Framework
stakeholders involved in business risk
3. Explain the dynamic nature of risk assessment; Assignment ISO 31000:2018 – Risk Management Principles and
4. Identify the types of risk facing an Guidelines
organization; Group Report
A Risk Management Standard – IRM/Alarm/AIRMIC 2002 –
developed in 2002 by the UK’s 3 main risk organizations.

The Turnbull Guidance

Any foreign authored book in Risk Management;

e-book in Risk Management

Any locally authored book in Risk Management

4
3 Risk Management Standards
a. COSO 2017 Enterprise Risk Management –
Integrating with Strategy and Performance
b. COSO 2004 Enterprise Risk Management -
Integrated Framework
c. ISO 31000:2018 – Risk Management
Principles and Guidelines
d. A Risk Management Standard –
IRM/Alarm/AIRMIC 2002 – developed in
2002 by the UK’s 3 main risk organizations.
e. The Turnbull Guidance
3 Enterprise Risk Management:
COSO ERM vs ISO Frameworks
a. Governance & Culture
b. Strategy & Objective Setting
c. Performance
d. Review & Revision
e. Information Communication & Reporting
3 Risk Management Process
a. Identifies Risk
b. Assesses Severity of Risk
c. Prioritizes Risks
d. Implements Risk Responses
e. Develops Portfolio View
After thorough discussion of the topics, the learner will be able Lecture/Discussion COSO 2017 Enterprise Risk Management – Integrating with Module 5
to: Strategy and Performance
1. Identify and asses how business organizations PPT presentation
use policies and techniques to mitigate various COSO 2004 Enterprise Risk Management - Integrated
types of business and financial risks; Recitation Framework
2. Explain and assess the importance of risk
transfer, avoidance, reduction, and acceptance. Assignment ISO 31000:2018 – Risk Management Principles and
Guidelines
Group Report
A Risk Management Standard – IRM/Alarm/AIRMIC 2002 –
developed in 2002 by the UK’s 3 main risk organizations.
The Turnbull Guidance
Any foreign authored book in Risk Management;
e-book in Risk Management
Any locally authored book in Risk Management
After thorough discussion of the topics, the learner will be able Lecture/Discussion COSO 2017 Enterprise Risk Management – Integrating with Module 6
to: Strategy and Performance
1. Examine the objectives, components, roles, and PPT presentation
responsibilities of the 2017 COSO Enterprise ISO 31000:2018 – Risk Management Principles and
Risk Management Framework; Recitation Guidelines
2. Describe the benefits of Enterprise Risk
Management–Integrated Framework; Assignment Any foreign authored book in Risk Management;
3. Compare the COSO risk management
approach with ISO 310000 and the Turnbull Group Report e-book in Risk Management
guidance;
4. Explore the elements and the processes of the Any locally authored book in Risk Management
risk management processes that can companies
can adopt in establishing effective risk
management framework.
After thorough discussion of the topics, the learner will be able Lecture/Discussion COSO 2017 Enterprise Risk Management – Integrating with Module 6
to: Strategy and Performance
1. Examine the objectives, components, roles, and PPT presentation
responsibilities of the 2017 COSO Enterprise ISO 31000:2018 – Risk Management Principles and
Risk Management Framework; Recitation Guidelines
2. Describe the benefits of Enterprise Risk
Management–Integrated Framework; Assignment Any foreign authored book in Risk Management;
3. Compare the COSO risk management
approach with ISO 310000 and the Turnbull Group Report e-book in Risk Management
guidance;
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 4. Explore the elements and the processes of the Any locally authored book in Risk Management
risk management processes that can companies
can adopt in establishing effective risk
management framework.
4 Basic Concepts and Elements of Internal Control After thorough discussion of the topics, the learner will be able Lecture/Discussion COSO’s Internal Control – Integrated Framework Module 7
a. Definition to:
b. Objectives 1. Define and describe control and different types PPT presentation The Cadbury Model
c. Limitations of controls
d. Classification 2. Describe the COSO’s Internal Control – Recitation Criteria of Control (CoCo)
e. Internal Control in Smaller Entities Integrated Framework
3. Describe alternative internal control Assignment Turnbull Report
frameworks such as the CoCo Model
4. Explain the five components of internal control Group Report COBIT

Any foreign authored book in auditing;

e-book in auditing

Any locally authored book in auditing

4 Internal Control Framework After thorough discussion of the topics, the learner will be able Lecture/Discussion COSO’s Internal Control – Integrated Framework Module 7
a. COSO to:
b. CoCo 1. Define and describe control and different types PPT presentation The Cadbury Model
c. Turnbull report of controls
d. Cadbury 2. Describe the COSO’s Internal Control – Recitation Criteria of Control (CoCo)
e. COBIT Integrated Framework
3. Describe alternative internal control Assignment Turnbull Report
frameworks such as the CoCo Model
4. Explain the five components of internal control Group Report COBIT

Any foreign authored book in auditing;

e-book in auditing

Any locally authored book in auditing

4 Evaluating the Design and Effectiveness of Internal After discussing the topics, the learner will be able to: Lecture/Discussion COSO’s Internal Control – Integrated Framework Module 8
Control 1. Understand the criteria in the evaluating the
a. Planning design and effectiveness of internal control PPT presentation The Cadbury Model
b. Gathering and Evaluating Audit Evidence 2. Understand different methodologies used in
c. Reporting evaluating internal control Recitation Criteria of Control (CoCo)
d. Follow up 3. Apply these methodologies and evaluate
internal control components, including Assignment Turnbull Report
deficiencies and significant deficiencies in
internal control Group Report COBIT

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 4. Understand the nature and explain the
rationale for conducting tests of controls Any foreign authored book in auditing;
5. Discuss the requirements and methods of how
reporting significant deficiencies in internal e-book in auditing
control are provided to management and those
charged with governance Any locally authored book in auditing
4 Audit Sampling After discussing the topics, the learner will be able to: Lecture/Discussion Any foreign authored book in auditing; Module 8
a. Nature and purpose 1. Understand the nature and purpose of audit
b. Sampling and non-sampling risk sampling PPT presentation e-book in auditing
c. Statistical and non-statistical sampling 2. Know the rationale for the audit sampling
d. Attributes sampling (attribute estimation, 3. Distinguish between sampling and Recitation Any locally authored book in auditing
sequential, discovery sampling) nonsampling risk
e. Sample size and sample selection methods 4. Know the statistical and nonstatistical Assignment
f. Steps in the application of audit sampling sampling
5. Distinguish between attribute and variables Group Report
sampling
6. Know the basic concept of how sample results
are evaluated
4 Testing the Effectives of Controls After discussing the topics, the learner will be able to: Lecture/Discussion Any foreign authored book in auditing; Module 8
a. Sales Transactions 1. Understand the nature and explain the
b. Cash Receipts Transactions rationale for conducting tests of controls PPT presentation e-book in auditing
c. Purchase Transactions 2. Understand the relationship between controls Recitation
d. Cash Payment Transctions and their effect on the assertions embodied in Any locally authored book in auditing
e. Payroll Transactions the financial statements Assignment
f. Production Transactions 3. Know what test of controls may be undertaken
g. Inventory Warehousing Transactions on different accounting cycles Group Report
4 Reporting After thorough discussion of the topics, the learner will be able Lecture/Discussion Any foreign authored book in auditing; Module 8
a. Facts to:
b. Findings 1. Describe the nature of the reports on audited PPT presentation e-book in auditing
c. Conclusions financial statements
d. Opinions 2. Give examples of the reports on audited Recitation Any locally authored book in auditing
e. Recommendations. financial statements
3. Understand when and how to modify the Assignment
reports on audited financial statements
Group Report
4 Fraud Risks After thorough discussion of the topics, the learner will be able Lecture/Discussion Any foreign authored book in auditing; Module 9
to:
1. Interpret fraud risks and types of frauds and PPT presentation e-book in auditing
determine whether fraud risks require special
consideration when conducting an Recitation Any locally authored book in auditing
engagement
Assignment

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 2. Evaluate the potential for occurrence of fraud Group Report
(red flags, etc.) and how the organization
detects and manages fraud risks
3. Recommend controls to prevent and detect
fraud and education to improve the
organization's fraud awareness
4. Recognize techniques and internal audit roles
related to forensic auditing (interview,
investigation, testing, etc.)
FINAL DEPARTMENTAL EXAMINATION
Suggested Readings and References
The IIA’s International Standards for the Professional Practice of Internal Auditing (Standards); IIA’s Code of Ethics; SEC Code of Corporate Governance; G20/Organization for Economic Co-operation and Development (OECD) Principles of
Corporate Governance; Sustainability Reporting Guidelines for Publicly Listed Companies (Memorandum Circular No. 4, series of 2019); COSO 2017 Enterprise Risk Management – Integrating with Strategy and Performance; COSO 2004 Enterprise
Risk Management - Integrated Framework; ISO 31000:2018 – Risk Management Principles and Guidelines; The Turnbull Guidance; A Risk Management Standard – IRM/Alarm/AIRMIC 2002; Revised Corporation Code ; Corporate social
responsibility and good governance (Samuel Mejia Salvador, Gloria J. Tolentino-Baysa, Ellinor C. Fua Geronimo); Ethics and the conduct of business (John R. Boatright); Corporate Responsibility: governance, compliance and ethics in a sustainable
environment (Tom Cannon); Risk assessment and decision analysis with Bayesian networks (Norman Fenton, Martin Neil); Risk: an introduction: the concepts of risk, danger and chance (Ben Ale); Accounting and auditing research a practical guide
(Weirich, Thomas R.); The operational auditing handbook: auditing business processes (Chambers, Andrew); Quick Notes on Practical Auditing (Binaluyo); Internal auditing principles and practices (Dizon, Cecilio L.); Level of employee awareness
on the fraud policies and acts of the finance and accounting department in a shared service company (Veronica C. Fulleros); Fraud risk management practices of universal and commercial banks (Allan D. Lanzuela); Fraud prevention and detection:
warning signs and the red flag system (Rodney T. Stamler, Hans J. Marschdorf, Mario Possamai); Governance, Business Ethics, Risks Management and Internal Control, Essentials of Internal Auditing, 2020 Edition (Oliveros & Ortega)
Course Grading System

Class Standing 70%

Quizzes 70%
Assignments 10%
Recitation 10%
Attendance 10%
Departmental examination 30%
Total 100%

Final Grade = (1st Grading Period + 2nd Grading Period)

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Classroom Policy
ATTENDANCE. The allowed number of absences for students enrolled in ACCO 20163 with once-a-week meeting is three (3). Request for excused absences or waiver of absences must be presented upon reporting back to class. Special examinations
will be allowed only in special cases, such as prolonged illness. It is the responsibility of the student to monitor his/her own tardy incidents and absences that might accumulate leading to a grade of “FA” (Failed due to Absences). It is also his/her
responsibility to consult with the teacher, chair or dean should his/her case be of special nature.
ACADEMIC HONESTY. All BSA students are expected to be academically honest. Cheating, lying, and other forms of immoral and unethical behavior will not be tolerated. Any student found guilty of cheating in examinations will (at a minimum)
receive a grade of 5.0 in the said test.
Consultation Time
Schedule of meeting with the teacher to discuss a particular problem with a student in order to provide advice.