16-07-2014, 12:51 PM
The Role of Financial Management
The Role of Financial Management.ppt (Size: 774.5 KB / Downloads: 14)
After studying Chapter 1, you should be able to:
Explain why the role of the financial manager today is so important.
Describe "financial management" in terms of the three major decision areas that confront the financial manager.
Identify the goal of the firm and understand why shareholders' wealth maximization is preferred over other goals.
Understand the potential problems arising when management of the corporation and ownership are separated (i.e., agency problems).
Demonstrate an understanding of corporate governance.
Discuss the issues underlying social responsibility of the firm.
Understand the basic responsibilities of financial managers and the differences between a "treasurer" and a "controller
Investment Decisions
What is the optimal firm size?
What specific assets should be acquired?
What assets (if any) should be reduced or eliminated?
Asset Management Decisions
How do we manage existing assets efficiently?
Financial Manager has varying degrees of operating responsibility over assets.
Greater emphasis on current asset management than fixed asset management.
Sarbanes-Oxley Act of 2002
Sarbanes-Oxley Act of 2002 (SOX): addresses corporate governance, auditing and accounting, executive compensation, and enhanced and timely disclosure of corporate information.
Imposes new penalties for violations of securities laws.
Established the Public Company Accounting Oversight Board (PCAOB) to adopt auditing, quality control, ethics, disclosure standards for public companies and their auditors, and policing authority.
Generally increasing the standards for corporate governance.