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Annamaeorcio TP1 (Governace)

Big Builder's Conglomerates Inc. has several major issues that need to be addressed regarding related party transactions and disclosures. The company leases land from its parent company and obtained a large loan from its sister company. These related party transactions require effective disclosure policies and procedures to improve transparency. While the company maintains some disclosure practices, it could establish a disclosure committee and more formal policies to ensure timely and appropriate communication of financial and corporate information to shareholders. The hiring of a special consultant could help provide financial management advice, but more details are needed to fully understand their role and responsibilities.

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173 views2 pages

Annamaeorcio TP1 (Governace)

Big Builder's Conglomerates Inc. has several major issues that need to be addressed regarding related party transactions and disclosures. The company leases land from its parent company and obtained a large loan from its sister company. These related party transactions require effective disclosure policies and procedures to improve transparency. While the company maintains some disclosure practices, it could establish a disclosure committee and more formal policies to ensure timely and appropriate communication of financial and corporate information to shareholders. The hiring of a special consultant could help provide financial management advice, but more details are needed to fully understand their role and responsibilities.

Uploaded by

anna mae orcio
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Name: Anna Mae A.

Orcio Year & Section: BSA 3-A

CASE ANALYSIS: Big Builder’s Conglomerates Inc.

TASK PERFORMANCE

Required:

a. Assuming you are the author of the three (3) companies: Builder’s Conglomerates,

Rural Bank, and GSy City Mall, what are the major issues, concerns, and

disclosures that need to be addressed?

 As an auditor, the major issues and disclosure to be addressed is the leasing one-

hectare land from Big Builder’s Conglomerates and having the loan of about 10M

loan from their sister company. This kind of transaction can be investigated to be

able to make the company improve their internal control system. During this field

work, a company should expect auditors to be on the hunt for undisclosed related

parties and unusual transaction such as having transactions from other country.

b. After identifying the major issues, do you think Big Builder’s Conglomerates has

effective disclosures policies and procedures? Why or why not?

 Yes, because Gabriel Sy is maintaining a substantial personal special savings

deposit account enjoying preferential Interest rate with the bank. If there have

been transactions between related parties, disclose the nature of the related party

relationship as well as information about the transactions and outstanding

balances necessary for an understanding of the potential effect of the relationship

on the financial statements.


c. How can Big Builder’s improve their disclosure policies and procedures? Create one

(1) based on your knowledge from the Code

 The Company discloses its corporate information in accordance with the

Companies Act, Financial Instruments and Exchange Act and other laws and

regulations as well as with the timely disclosure rules of the Tokyo Stock

Exchange (the “timely disclosure rules”), where the Company’s stock is listed.

Also, with respect to the information that is not covered by the timely disclosure

rules, including non-financial information, the Company endeavors to voluntarily

disclose such information taking into consideration the timeliness and fairness of

information disclosure, to the extent that the Company believes such disclosure is

useful for shareholders and investors to reach investment decisions. The company

has established a Disclosure Committee to facilitate timely and appropriate

disclosure of corporate information. The Committee is chaired by the Chief

Information Officer and comprises the managers of several departments to enable

cross-sectoral discussions.

d. What can you say about the hiring of Special Consultant on Financial a

management Advisory by Mr. Sy?

 They are responsible for ensuring that the organization accomplishes

their financial goals through various means. It could work as part of a team. Mr.

Sy provides guidance and advice for people or companies that need help with

building wealth and making smarter investments. And there use their knowledge

to choose from a wide range of financial products to meet the investment

strategies and financial goals of each client.

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