Case Study: Analysis of Corporate Governance and Management Control at Kendallville Bank
International Journal of Applied Economic Studies 4 (3), pp. 14-20
8 Pages Posted: 26 Aug 2016
Date Written: June 16, 2016
The present paper addresses the case study of a financial institution, the Kendallville Bank, developed by The Anti-Fraud Collaboration. The constituents of the Collaboration are the Center for Audit Quality, Financial Executives International, the National Association of Corporate Directors, and The Institute of Internal Auditors. These organisations are concerned with financial reporting fraud deterrence and detection. The case study approaches financial reporting fraud at a multidimensional level. It explores the corporate governance arrangements and management control instruments at place at the Kendallville Bank. The findings are discussed against the theoretical framework of the Agency Theory and the Stewardship Theory. Shortcomings of the arrangements are identified and safeguards are recommended on the background of international corporate governance best practice and academic literature. The risks arising from corporate governance weaknesses are addressed through various risk control procedures. Culture control is acknowledged as a major instrument to improve effectiveness and performance of the bank through a shift in the interpersonal interaction of the Board members, the executive team and the auditors.
Keywords: Corporate Governance, Board Committees, Auditor Ethics, Agency Theory, Stewardship Theory, Change Risk, Culture Control
JEL Classification: A23, G21, G31, G34, M12, M14, M42, M53
Suggested Citation: Suggested Citation