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Published byJoy Clark Modified over 9 years ago
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Legal framework Look at the legal compliance and framework a business is subject to.
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Legal compliance All financial and payroll information & records are subject to legal and regulatory requirements It is important to ensure all requirements are met, it helps the organisation Having a positive reputation and track record of financial integrity and legal compliance enables the organisation attract and retain investors, staff, customers and suppliers
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Legal compliance To avoid and minimise penalties from non- compliance – imprisonment -Costs to bring records to compliance -Loss of shareholders, market price
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Ensure compliance Make all employees aware of the importance of compliance Brief employees of their roles and responsibilities under the law Complete up-date briefings where laws change Base organisational policies and procedures on legal requirements Monitor – put in place controls and checks
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Legal framework Organisation work within a framework of laws dealing with specific issues Compliance of the laws is important because: – Protect people from loss and suffering – Minimum acceptable standard of management – Possible financial & operational penalties from non-compliance – Damage the reputation – Burden of costs & future scrutiny
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Main source of the laws are: – UK Statues (Act of Parliament) – EU Directives Every organisational member has a responsibility to comply, ensure and monitor the areas of responsibility – Discrimination within work – Data protection – Health & safety – Theft & fraud – criminal act – Financial reports and records - HMRC
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Examples of regulations within an organisation ( could be tested in the assessments ) Areas of the law How the organisation does business Examples Contract law – What constitutes a valid contract – How rights & obligations can be enforced Data protection – What personal data can be held legally – The use of personal data – Protection of the individual Intellectual property – Protecting the rights of the product – design, written text, copying of work
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continuation Areas of the law Treatment of employees in an organisation Examples Employment protection – Protect from unfair dismissal – Redundancy practices Health & safety – Protection of staff and visitors to a site Working conditions, pay and benefits – Minimum pay, working hours Diversity & equal opportunity – Protection against harassment and discrimination at work
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continuation Areas of Law Responsibility to shareholders & stakeholders Examples Company law & corporate governance – Duties of directors of the company – Keeping accounts & registers – Preparing and auditing financial statements – Preparing and circulating annual reports & accounts
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Continuation Areas of the law Responsibility to the state Examples Collection of and payment of taxes – VAT to HMRC – NI & PAYE to HMRC Compilation and provision of reports & returns
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Additional controls Regulatory Bodies – Oversee the activities of business in varying areas Accounting standards board (ASB) Health & Safety Executive Codes of practice – Set of guidelines/standards agreed by representatives or advisory bodies of the business area International Financial Reporting Standards (IFRS) – reporting of financial performance International Standards on Auditing – verification of reports Professional bodies – Develop and enforce standards of competence, ethical conduct and professionalism
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