IRAQ Law and Practice Contributed by: Ahmed Al-Janabi and Sarmad Akrawi, MENA Associates in association with AMERELLER
7.2 Requirements for Directors Concerning Management Risk and Internal Controls The board of directors of a JSC is required to establish an audit committee within the board that will recommend external, independent auditors. These members may not be officers or employees of the company, or hold 10% or more of its shares. The board of directors of a JSC, or managing director in the case of other companies, must also prepare a report in relation to the final accounts that includes details on the company’s activities, such as any transaction in which major shareholders, board members or the directors have a direct or indirect interest. The chairman of a JSC, or managing director in the case of other companies, must sign the company’s final accounts and shall be liable for the correctness of the statements.
pany. This is required for all companies regis - tered in Federal Iraq. None of the filings made with or sent to the Reg - istrar are made publicly available. The company may be subject to inspection by the Registrar for any violation of the aforemen - tioned. Any questionable findings will be report - ed to the responsible authorities in order for the appropriate action to be taken and will lead to suspension of the company’s file and payment of fines. If the Registrar is prevented from see - ing the company’s records or documents, the company official responsible for this action shall be, according to the Companies Law, subject to imprisonment for up to six months or a fine of up to IQD12 million. 7. Audit, Risk and Internal Controls 7.1 Appointment of External Auditors External auditors are appointed by the general assembly and are required to evaluate a com - pany’s final accounts based on the law and the company’s articles of association, and should apply international accounting standards. In a JSC, external auditors are selected by the audit committee established by the board of directors. The external auditors meet with the audit committee and apply international accounting standards in their work. They may be subject to questions regarding the accuracy and correctness of their reports. In a mixed company, the accounts are required to be audited by the Financial Control Bureau.
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