Governance Mechanisms

Many countries in Asian Pacific regions including: Japan, Korea, Philippines, and Australia have made advancements in their corporate governance standards and regulations in recent decade. There are two (2) main point of time which is signaling the improvements made in the Asian countries’ corporate governance policies. First period is the time during 1999-2003 after the Asian financial crisis taking place in 1997-1998 and second period is the current time, after the financial crisis 2007-2009 with impacts from US and Europe large economies. The Global corporate governance forum was organized and country’s corporate governance council or committee or forum is also established for recommendations and implementation of new key principles in this field. This research paper is trying to take an implementation – oriented writing style and focus on current corporate governance issues during and after impacts from scandals and crises.

Besides, this research paper aims to provide a writing style to adapt to an understandable reading to most of readers in academic field who is both familiar and not familiar to the corporate governance subject.

The subsequent sessions are organized as following. First (1st) session is a literature review for some of corporate governance researches with impacts from corporate scandals, market manipulation and financial crisis. Second (2nd) session is built with three (3) main themes of theories such as: corporate governance and financial crisis, corporate scandals and market manipulation. Next, (3rd), session is covered with a summary of methodology used in empirical results. The fourth (4th) session is focusing on main findings of this paper which include four (4) key findings on: a) Corporate governance ...

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...example is Xerox during the fiscal periods 1997-2000.

Besides, the second manipulation technique used is the negative manipulation of expenses of the company by decreasing its expenses to get a high nominal profit. Worldcom, Inc., has an under-reporting expenses and capitalizing its balance sheet. The amount of $3,8b cash is recognized as capital expense, instead of operating expense in the fiscal year 2002.

B.2 - The manipulation techniques in both the income statement and balance sheet:

The technique is used by the large energy company, Enron, in the year 2001, which is the hiding of its debt and therefore help to increase its profit of about $1 billion. Or the manipulation trick is done by a Texas co., Waste management Co.,

in which its nominal profits is manipulated or inflated by extending depreciation time of property and equipment in the year 2002.