FIN3103 Activity

The Security & Commodity Authority was established by the UAE Federal Law No. 4 in 2000.
Answer the following questions
a) What is the purpose and objectives of SCA ?
b) Where does the funding for the SCA come from?

1. To provide the opportunity to invest savings and funds in securities and commodities in manner
that:
Ensures the interest of the national economy, secures the integrity and accuracy of the transaction ;
Ensures prices are determined by means of supply and demand
Protect investors by establishing the bases for sound and just dealings between market participate

2. To develop investment awareness by conducting research and reporting the findings and
recommendation;
3. To ensure financial and economic stability

b) Where does the funding for the SCA come from?

- Annual funds allotted by federal government.
- Income which accrues under the regulation from the following:
a. listing fee and annual fees levied on the companies and the brokers in the market
b. fees levied on trading, and fees for the service rendered by the markets
c. fines levied on the brokers and companies whose securities are listed for trading ,and any other
fines
 Internal control

You are setting up a new company in the Dubai Financial Center. You want to ensure that your new
company adheres to rules and regulations stipulated by the Government of UAE. You are thinking of
internal controls but your other stakeholders are not convinced.

Define what do you mean by Internal controls and state why they are important? Also give an
example of Internal control which you have observed in real life to convince your stakeholders.

Definition: “Internal controls” refer to those procedures within a company that are designed
to reasonably ensure compliance with the company's policies. ... Those that affect a
company's compliance with laws and regulations. Those that affect a company's financial
reporting.

Why Internal Control is Important

A company must have a rigorous system of internal control designed
 to evaluate its risk management measures and procedures,
 to apply the rules of governance in sound fashion,
 to ascertain compliance by the company and its employees with the applicable laws,
regulations and decrees governing its operations, as well as internal procedures and policies,
and
 to review the financial information submitted to senior management and used to draft
financial statements.
 Audit
For your new company you are planning to do audits, as they are important for corporate governance
process . Define what do you mean by audit and Identify different types of audits and their users in
firms

Audits are important for corporate governance and an auditor is a person or a firm appointed by a
company to execute an audit.

TYPES OF AUDITORS
- Internal Auditor: Internal Audit also referred as operational audit, is a voluntary appraisal activity
undertaken by an organization to provide assurance over the effectiveness of internal controls, risk
management and governance to facilitate the achievement of organizational objectives. Internal
auditor is an employee of the organization who report to the audit committee of the board of
directors.
- External Auditor: External audit, also known as financial audit and statutory audit, involves the
examination of the truth and fairness of the financial statements of an entity by an external auditor
who is independent of the organization in accordance with a reporting framework such as the IFRS.
Company law in most jurisdictions requires external audit on annual basis for companies above a
certain size.