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Case Study Analysis of Corporate Governance and Management Control at Kendallville Bank

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  • Eisenberg, Paul

Abstract

The present paper addresses the case study of a financial institution, the Kendallville Bank, developed by The Anti-Fraud Collaboration. The constituents of the Collaboration are the Center for Audit Quality, Financial Executives International, the National Association of Corporate Directors, and The Institute of Internal Auditors. These organisations are concerned with financial reporting fraud deterrence and detection. The case study approaches financial reporting fraud at a multidimensional level. It explores the corporate governance arrangements and management control instruments at place at the Kendallville Bank. The findings are discussed against the theoretical framework of the Agency Theory and the Stewardship Theory. Shortcomings of the arrangements are identified and safeguards are recommended on the background of international corporate governance best practice and academic literature. The risks arising from corporate governance weaknesses are addressed through various risk control procedures. Culture control is acknowledged as a major instrument to improve effectiveness and performance of the bank through a shift in the interpersonal interaction of the Board members, the executive team and the auditors.

Suggested Citation

  • Eisenberg, Paul, 2016. "Case Study Analysis of Corporate Governance and Management Control at Kendallville Bank," MPRA Paper 73257, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:73257
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    References listed on IDEAS

    as
    1. Melinda Muth & Lex Donaldson, 1998. "Stewardship Theory and Board Structure: a contingency approach," Corporate Governance: An International Review, Wiley Blackwell, vol. 6(1), pages 5-28, January.
    2. Joanna L. Ho & Cheng-Jen Huang & Anne Wu, 2011. "The Impact of Management Control Systems on Efficiency and Quality Performance —An Empirical Study of Taiwanese Correctional Institutions," Asia-Pacific Journal of Accounting & Economics, Taylor & Francis Journals, vol. 18(1), pages 77-94.
    3. Jonathan D. Arthurs & Lowell W. Busenitz, 2003. "The Boundaries and Limitations of Agency Theory and Stewardship Theory in the Venture Capitalist/Entrepreneur Relationship," Entrepreneurship Theory and Practice, , vol. 28(2), pages 145-162, March.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Corporate Governance; Board Committees; Auditor Ethics; Agency Theory; Stewardship Theory; Change Risk; Culture Control;
    All these keywords.

    JEL classification:

    • A23 - General Economics and Teaching - - Economic Education and Teaching of Economics - - - Graduate
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • M42 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Auditing
    • M53 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Training

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