Governance Code(applicable in both UK and Irish jurisdictions), Turnbull Guidelines on internal control and the COSO framework.
PART 2 Financial Analysis
Assess the financial picture of the corporation by analysing its financial performance and position. This will involve understanding the liquidity, solvency and profitability of the entity and how these indicators, when assessed together, allow you to comment on its financial strength. Pursuing the following issues will assist in your assessment:
• Is it possible to detect how financial accounting information affected economic performance?
• Is the overall assessment in line with marketplace expectations as reflected in its p/e ratio and its market capitalisation?
• What is the value or worth of the entity?
• Is the stock a “value” or a “growth” type?
• Is it capable of handling additional debt?
• Is free cashflow present in the entity?
• Is it capable of making an acquisition or is it vulnerable to a takeover?
Identification of a possible systemic risk in the corporation should be highlighted. Avail of your assessment to determine whether or not to advise investing in the corporation.
PART 3 Suggested Future Development
This third component avails of determinations and assessments derived from the two components above and attempts to speculate on a new direction for the corporation. It will require an understanding of key value drivers, some of which may not be present in your corporation, but which you may recommend to facilitate this fundamental(not incremental) and strategic change. Some possible changes may include: