Party	Overview of Responsibilities
Stockholders	Provide effective oversight through election of board members,through approval of major initiatives (such as buying or sellingstock), and through annual reports on management compensation fromthe board
Board of Directors	Serve as representatives of stockholders; ensure that theorganization is run according to the organization’s charter andthat there is proper accountability Specific activities include: Selecting management Reviewing management performance and determiningcompensation Declaring dividends Approving major changes, such as mergers Approving corporate strategy Overseeing accountability activities
Management	Manage the organization effectively; provide accurate and timelyaccountability to shareholders and other stakeholders Specific activities include: Formulating strategy and risk management Implementing effective internal controls Developing financial and other reports to meet public,stakeholder, and regulatory requirements Managing and reviewing operations Implementing an effective ethical environment
Audit Committees of the Board of Directors	Provide oversight of the internal and external audit functionand over the process of preparing the annual financial statementsand public reports on internal control Specific activities include: Selecting the external audit firm Approving any nonaudit work performed by the audit firm Selecting and/or approving the appointment of the chief auditexecutive (internal auditor) Reviewing and approving the scope and budget of the internalaudit function Discussing audit findings with internal and external auditors,and advising the board (and management) on specific actions thatshould be taken
Regulators and Standards Setters (PCAOB, SEC, AICPA,FASB, IAASB, IASB)	Set accounting and auditing standards dictating underlyingfinancial reporting and auditing concepts; set the expectations ofaudit quality and accounting quality Specific activities include: Establishing accounting principles Establishing auditing standards Interpreting previously issued standards Enforcing adherence to relevant standards and rules for publiccompanies and their auditors

Discuss

Consider the roles and responsibilities of each of these partieswith corporate governance responsibilities. Which party do youthink is most responsible for preventing fraud? Whichparty do you think is most responsible for detectingfraud?

Provide formal discussion.