UNIVERSITY OF NAIROBI

SCHOOL OF BUSINESS
DEPARTMENT OF FINANCE AND ACCOUNTING
DAC 204: PRINCIPLES OF INTERNAL CONTROL AND CORPORATE
GOVERNANCE

COURSE OUTLINE

COURSE FACILITATOR: OOKO J.

Prerequisite : DAC 112 :Fundamentals of F.A II

A) Course Description
This course focuses on the original and contemporary problems of how to establish effective ownership
and control of businesses; the different corporate governance systems and processes by which ownership
and control is assured; an understanding of the different institutional, cultural and political environments
in which businesses must operate; and a recognition of Business ethics and internal control as important
ingredients for successful businesses.

B) Course objective
This course provides a foundation to understanding the ownership and control problems of the business
enterprise, and the different systems that attempt to resolve these issues.

C) Mode of delivery
This course will be conducted mainly by use of lectures and class discussions.

D) Evaluation
Evaluation of students will be done in accordance with the university regulations, which require
continuous assessments and final examination:

Assignments 10%
Tests (2) 20%
Final examination 70%
100%
The pass mark overall will be 40%

E: Course content

1. Business Ethics
 Principles of business ethics
 Ethical theories and perspectives in Business
 Significance of business ethics

2. Managing ethics in the work place

 Reasons for Unethical Behavior
 Business ethics and compliance programmes - code of ethics ,whistle blowing policies, conflict
of interest policies, gift policies ,chinese wall policies, etc

3. Professional values and ethical principles

 Fundamental ethical principles for professional accountants

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  Threats to ethical conduct of accountants and safeguards to the threats
 Unethical practices in accounting and the causes

4. Responsible Business Enterprise(RBE)

 Nature of a Responsible Business Enterprise
 Corporate Social Responsibility (CSR)
 Responsibility in world business: Managing harmful side-effects of corporate activity
 The Caux Round Table principles for Responsible Business
 The Emerging Role of Foundations in Managing CSR activities

5. Internal Controls
 Objectives of internal control
 Roles and responsibilities in internal control
 Types of internal control

6. Internal controls for the accounting function

 Internal controls in accounting journals, ledger, source documents and books of original entry
 Internal controls in Purchasing , receiving and accounts payable
 Internal controls in sales and accounts receivable, cash payments and short term liabilities
 Internal controls in payroll and human resource services
 Internal controls in cash receipts and liquid assets, inventories, non-current assets

7. Corporate Governance
 Definition of Corporate Governance
 Theories of Corporate Governance
 Corporate governance practices
 Characteristics of good corporate governance
 Importance of corporate governance
 Board performance and effectiveness-Board evaluation and assessment ,board committees,
board communication with stakeholders
 Responsibilities in corporate governance-CEO, board chairman, board members, company
secretary, shareholders, etc

8. Elements , Systems and Mechanisms of Corporate Governance

 Institutional elements, political mechanisms, market based systems and relationship based
systems
 Internal vs external corporate governance mechanisms
 Audit as a corporate governance tool
 Developing practices and emerging standards of Corporate Governance

9. Corporate governance and Enterprise Risk Management

 Components of Enterprise Risk Management(ERM)
 The roles of board of directors in ERM
 Risk management process

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F: READING MATERIALS
F1:Main Text
Allan Trenerry: Principles of internal control and corporate governance .Mc Graw-Hill.2009

F2:Other recommended texts

1.Accountants Act of Kenya (2008) Revised 2012

2.Cadburry, A. (2002).Corporate Governance and Chairmanship: A personal view, Oxford University

Press.

3.Christine A.Malin: Corporate Governance 4th Edition

4.Clarke ,T.(2004).Theories of corporate Governance; The philosophical foundations of corporate

governance, Routledge

5.De George, R.T (2006).Business Ethics .6TH Edition, Pearson Prentice Hall

6. Erick Banks: Corporate Governance: Financial Responsibility, Controls and Ethics.4th Edition
.Paigrave MacMillan

7.Fred R.Kaen, Blue Print for Corporate Governance. Prentice Hall of India.2008
8.Fritzsche,D.J.(2005). Business Ethics: A global and Managerial Perspective, McGraw-Hill
9.Hartman,L.P.(2005).Perspectives in Business Ethics, McGraw-Hill
10.Monks,R A.G and N.Minow (2004).Corporate Governance, Blackwell Publishing
11. O’Sullivan,M.(2000).Contents for Corporate Control: Corporate Governance and Economic
Performance in the United States and Germany, Oxford University Press, USA