ADCCG emphasizes on the effectiveness of audit committees in improving and executing governance systems in companies operating in the country

 

The Abu Dhabi Center for Corporate Governance (ADCCG), an affiliate to the Abu Dhabi Chamber of Commerce and Industry, has organized a seminar on the effectiveness of audit committee and its impact on the objectivity of the internal auditors. The seminar witnessed the attendance of heads and managers of more than 90 public and private companies from Abu Dhabi.

Organizing the seminar comes within the framework of the Abu Dhabi Chamber in supporting economic, industrial and services companies to improve their products, activities and services and to achieve efficient and effective financial results.

Dr. Riham Suleiman Muqatesh, an expert in corporate governance, delivered a speech at the beginning of the seminar in which she stressed on the importance of the role of the audit committee in all companies considering their contribution to supporting governance systems and achieving better financial results as well as helping decision makers in taking precise and correct decisions and in providing high quality and accurate financial reports.
Dr. Muqatesh said that the presence of an audit committee in a company helps in building stronger and better relations with partners and stakeholders and increases its chances of entering financial markets and facilitate all its financial transactions.

The speaker also spoke about the impact of an effective audit committee on the objectivity of internal auditors in the banks operating in the UAE and that if having an effective audit committee with authority over the chief audit executive employment affects the internal auditor’s objectivity in the banks operating in the country.

Dr. Muqatesh defined the audit committee as a selected number of members of a company’s Board of Directors whose responsibility include helping auditors remain independent of management and that the code requires that the audit committee ought to comprise no less than three non-executive directors the majority of which should be independent directors (one of whom should head the committee) and one member at least should have financial expertise. She also said that the meetings of the audit committee should be held at least once every quarter, and they must submit written reports to the Board of Directors regarding their actions, findings and recommendations.

Dr. Muqatesh also noted that the Association of Chartered Certified Accountants identified the main factors behind the financial crisis which are: the failure of corporate governance; the failure of institutions to asses and manage the existing links between risks and the remunerations and incentive systems which were not designed to favor stockholders at all; errors in the process of managing and identifying risks; weak influence or even minimal manifested power of banks’ risk management departments; and the weaknesses in the financial reporting systems and regulations.

A press release published by the ADCCG said that holding such seminars by the center comes from Abu Dhabi becoming, thanks to development and growth in all economic sectors, a center for a huge number of national, regional and international companies; hence, searching for mechanisms proper to developing these companies has become an objective the wise leadership aims for because the returns from such development would be in the best interest and fame of the country as well as for the benefit of such companies themselves.

The press release asserted Abu Dhabi Chamber’s awareness in providing more services for its members, companies and the establishments which benefit from its services.