Post governance audit

Meaning of Subsequent Event
Subsequent events are “those events, favorable and unfavorable, that occur between the reporting year date and the date when the Governance Audit reports are authorized for issue.”

General Guidelines on Subsequent Event
a) Subsequent events provide evidence of conditions that either existed at the reporting year end date or are indicative of conditions that arose after the year end date. Examples of subsequent events include:
(i) The effect of changes in legislation and government policy.
(ii) The discovery of a material governance lapse like a financial error or fraud occurring due to lack of board financial oversight.
(iii) Major mergers and acquisitions the organization.
(iv) Change of principal activities of the organization.
(v) Resignation of the chairperson or a board member(s) without proper explanation.
(vi) Resignation or termination of services of the Chief Executive Officer (CEO) or key management staff without proper explanation.
(vii) Sale or disposal of shares and stocks a key shareholder to a profitable organization.
(viii) Sale of a significant part of the trading activities or discontinuation of a major operation.
(ix) Disproportionate rise or decline in the value of property or other investments.
(x) Strikes and other labor disputes.

b) A subsequent event’s review is performed as near as practicable to the date of the governance auditor’s report using the following procedures:
(i) Reviewing management’s procedures over identification of subsequent events.
(ii) Reviewing minutes of the meetings of shareholders; the board of directors; and audit and executive committees held after the reporting period and inquiring about matters discussed at meetings for which minutes are not yet available.
(iii) Reviewing the organization’s latest available statutory reports and related management reports.
(iv) Inquiring from the management on governance issues relating to litigation and claims.
(v) Inquiring from the management whether any subsequent events have occurred which might affect the Governance Audit report.
(vi) Reviewing annual Board Evaluation Reports.

Recording and Conclusion
The Governance Auditor shall identify subsequent events, which materially affect the Governance Audit report and ensure that they are properly recorded and adequately disclosed.

Action after the Governance Audit Report is signed but before it is issued
Shall any matters, which materially affect the Governance Audit report arise after the final report has been issued, it is the responsibility of Management to inform the Governance Auditor of these matters. It is incumbent upon the Governance Auditor to discuss the matter with Management and take appropriate action.

Action after the Governance Report is adopted Members
If after the Governance Audit report has been issued, the Governance Auditor discovers material facts which existed at the date of the Governance Auditor’s report and which, if known at that date, may have caused the Governance Auditor to modify the report, the Governance Auditor shall consider whether the Governance Audit report needs revision, discuss the matter with Management and take appropriate action. The revised Governance Audit report shall contain an “emphasis of matter paragraph” to reference changes in the report.



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