The main axes in business governance in joint stock companie s

With the great development in investment activities and the increasing spread of money companies that have become the most common economic entities

Amer Ibrahim - • External audit and audit

The main axes in business governance in joint stock companies : -

With the great development in investment activities and the increase in the spread of money companies, which have become the most common economic entities, which consists of a capital of a group of shareholders who may not have experience in the field of the company's activities, but the goal is to invest their money within the company only and obtain returns from these investments in the form of profits generated from the company's activities... Here it was necessary to elect a board of directors of the company elected by the general assembly to be responsible for managing the activities and funds of the company and be responsible to the shareholders ... But who will be responsible for monitoring the performance of this board and the extent of its integrity in managing shareholders' funds???

The board of directors of the company in the money companies consists of elected members of the general assembly of the company (shareholders) and the elected board of directors is responsible for managing the company's funds and investments in a way that preserves the funds of the rest of the shareholders and achieves their goals in reaping profits through many procedures, including the development of effective internal control systems and follow-up compliance with them by the company's executive management, developing plans and budgets, monitoring their implementation, measuring deviations and intervening in addressing them, as one of the duties of the The elected administration is the development of administrative policies and the follow-up of executive managers and holding them accountable for the performance of their tasks. All this ensures the preservation of the company's investments and guarantees shareholders' rights.

Hence, it was necessary to have an external party appointed by a decision of the general assembly of the company to be responsible for reviewing and controlling the financial and administrative performance of the elected board of directors and expressing its opinion on the extent of its commitment to the application of the company's policies and the extent of its integrity and honesty in managing shareholders funds and also approving and reviewing the company's financial statements that reflect the success or failure of the elected board of directors in performing its responsibilities provided that this body submits its periodic reports to the general assembly of the company every fisclal period with expressing its opinion fairly and clearly in the company's financial statements, and this body is called (the company's auditor ) which is referred to in our conversation as the so called (accounting establishments ) from the above ,it is clear howimportant and dangerous the role played by the accounting institution is and the necessity of a high degree of integrity, transparency and justice in the performance of its tasks towards all concerned parties.

The dangers of the activities of these establishments are that in the absence of integrity and transparency, there may be collusion between them and the elected board of directors to cover up the failure that may exist in its work and thus present misleading results and reports to the members of the general assembly of the company that would make wrong decisions that affect the future of the company and the loss of shareholders' money ... This is in addition to the fact that unintentional errors may occur on the part of the accounting institution during the performance of its work as a result of the technical and professional weakness of the work team of these institutions, and in both cases, this does not exempt the accounting entity from its responsibility towards all parties and does not exempt it from being subject to legal accountability in the event that the affected parties resort to the judiciary.

Through our experiences as auditors in many companies, we have been exposed to some cases that reflect the importance of the role of the electedboard of directors and the role of the auditor in preserving the funds and rights of shareholders ... Examples of such cases include:

Status :

In contracting activities fake subcontractors are added in order to disburse sums of money under the name of these contractors.

In commercial and industrial activities Limiting one specific supplier to the supply of strategic items for operation in the company

Its impact on the company's funds :

Unlawful disburement of sums of money ( embezzlement of company funds ) and increase in operating cost and loss of shareholders funds in the short term

Manipulating the purchase prices in favor of the supplier without taking into account the comparative prices prevailing in the market, which leads to high operating costs and achieving net losses for the company

Role of the Board of Directors :

1. setting strict systrms for contracting with external parties ( contractors and suppliers ) through specialized contracting management and not thtough executive management

2. keeping a file that includes data and a copy of the offcial documents of the subcontractor and a copy of the contracts concluded and the implementation prices of the terms of the contract .

3. Approving the disbursement of contractor payments through the consuiting office and after the approval of the company's executive management manager

4. The Internal Audit Department reviews all documents dealing with the contractor

1. Setting control procedures that would not implement any purchase without attaching at least 3 quotations with a sample of items.

2. Procedures for controlling the items supplied by the warehouse management and verifying their compliance with specifications

3. Control procedures for non-payment of suppliers' dues until after verifying the receipt of the goods and their conformity with the specifications and commitment to the prices agreed upon in the approved price offer.

4. Develop systems that would not rely on one supplier to supply strategic items to the company and take into account the existence of more than one alternative.

5. The Internal Audit Department reviews all transaction documents

The role of the auditor :

1. verifying the application of the approved regulations and policies in this regard and their suitability to the nature of the activity and working conditions

2. verify the contracts concluded with external parties ( subcontractors ) and match the extracts received from it with the contracts in terms of quantity and value .

3.Review the disbursements made to the contractor and thir confomity with the terms of exchange in the contract and review the approval of the engineering department for extracts before disbursement

1. Review purchase invoices and varify them arithmetically and tax .

2. Review the attached warehouse receipt permits and quality audit reports

3. Review the purchase prices and match them with the quotations approved by the Procurement Department.

4. Review the other attached quotations and verify the reasons for choosing the offer in question

5. Review any contracts with the supplier and the price lists approved by the company's procurement department.

There are many errors that have been discovered through our previous experiences, whether these errors were unintentionally or for the purpose of manipulation, misinformation and embezzlement ... Which confirms the importance of the role of both the Board of Directors and the auditors in maintaining the continuity and growth of the company and preserving the funds of shareholders and stakeholders.

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