Agency Assurance - Universität St.Gallen

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the faces of a prism required to reveal MSI as complementary, not contradictory, in
presenting the true and fair view of the business’ results and prospects.
Figure 2-1. The Agency Assurance Model
True and Fair View
Management-Supplied Information
Source: Own representation.
2.2.2 The Constitution Axis
The constitution axis encompasses the audit committee’s character and rights, two
sides of the same coin. The first critical aspect of character calls for committee
members to be individually qualified for the challenge of the position. They must
possess skills well developed to enable them to understand both the business
complexity and the information production and verification process, in order that they
can have reasonable confidence in the content and applicability of managementsupplied
information. As elected representatives of the shareholders, they must be
able and willing to make responsible decisions and proposals within the overall board
framework and structure, and to ensure that shareholders and other stakeholders
receive relevant information through appropriate and timely communication channels. 7
They should have organizational capabilities for assigning and agreeing upon
responsibilities in a collegial environment and for planning and following a review
schedule that allows them to fulfill their responsibilities effectively and expeditiously.
Academic research and regulatory initiatives that support the character aspect of the
constitution axis also include investigations into the composition of boards. Beside