Thesis-2003-Al-Moataz.pdf (35.54 MB)

The effectiveness of audit committees within Saudi corporations

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posted on 04.11.2010 by Ehsan Saleh Al-Moataz
Recognising the importance of audit committees as a major tool to increase confidence in financial statements, the Minister of Commerce in Saudi Arabia issued a resolution in January 1994 requiring all public companies to mandate the establishment of audit committees. This research seeks to explore the role of audit committees in Saudi Arabia and investigate whether the actual practice among these corporations is consistent with the best practice that was advocated from the recommendations of both academic and professional literatures. The intention was to survey audit committee members, internal auditors and external auditors about the effectiveness of audit committees. The questionnaire was adopted as the main instrument (followed by some interviews) to collect data in Saudi Arabia. There was a concern between the respondents that audit committees have little benefit in achieving what they were expected to do. The resolution of the Ministry of Commerce (1994) did not clearly explain the relationship between audit committees with the external and internal auditors, scope of work to be undertaken, independence, expertise, transparency, and the required qualifications and knowledge for audit committee members. There is an obvious problem with this resolution because it is too brief and there are no explanatory/guidance notes to accompany it. Therefore, a number of steps should be taken to transform the concept from a good idea on paper to a reality in practice. Ministry of Commerce should follow up its concern by issuing further clarification of what corporations must do exactly to implement the resolution.



  • Business and Economics


  • Business


© Ehsan Saleh Al-Moataz

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A Doctoral Thesis. Submitted in partial fulfillment of the requirements for the award of Doctor of Philosophy of Loughborough University.

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