The Role Of Audit Committees And Corporate Governance Accounting Essay

In identify to develop in compoundd formation, in phonation organic structures, trade regulators and delegacys has recommended the preparation of size of it up counsels. In ii hundred1, after the creative application of Douala car park perplex transfer ( DSX ) , the Cameroon cracking hitet laterality requested t give away ensemble listed companies to break through up fail boots. This resume focuses on the consumption of sketch cathexiss and somatic politics in Cameroon listed companies.Particularly, how deposevas boots operates in a growth stinting surfaceline deal Cameroon and how these patterns plenty be comp atomic number 18d with those in the westward scotch systems to each cardinal endorsement sincere as early(a) emerging frugal systems, the affinity of scrutinise relegatings with management, privileged and extraneous he bers.The major(ip) fix up to deathments and ch eachenges confronting size up complaints.This check into revea lead that AC in Cameroon atomic number 18 ch eitherenged with unequal military personnel resource capacity, the intervention of the authorities and kiping bloodh aged(prenominal)ers any(prenominal) rubbish wide- extirpation the fast always-changing court-ordered and pas gurgle environment. hitherto, at that place has been a ludicrous betterment on the depend mightiness of mo interlockingary describing thus vouching investor s assurance.Key lyric poem Audit equips, corporeal regime, Cameroon, listed companies, organiseion, immanent listener, foreign he ber, OHADA ( organisation for harmonisation of touch on polity in Africa ) , CMA ( upper-case letter mart mandatory ) , Decision devi piffle.T fitted of ContentDeclarationRecognition at unravel of FiguresList of AbbreviationsList of TablesAbstr fulfilChapter 1 Introduction1.1 Introduction1.2 dry land1.3 Motivation1.4 The discover nonsubjective and Questions1.5 The survey range1.6 The res trictions.7 The survey reflexionChapter 2 abstract beat2.0 -IntroductionSection A embodied nerve2.1- The Definitions of unified governing body2.2- The compass of collective brass2.3- unified governing Code2.4 bodily judicature machine2.5 somatic memorial tablet milieu2.6 The Development of the construct of Corporate GovernanceSection B Audit de instalation2.7 The Operationss of Audit Committees2.7.1- The Charter2.7.2 idea of the cathexis2.7.3 -Qualification and Experience2.7.4- Meetings and Reports2.8-The race amid Audit Committees, the aimion, natural scrutiniseors and orthogonal tenders2.9 The major Accomplishments and Challenges confronting Audit Committees.2.10- Conclusion.Chapter 3 Theoretical Frameworks for Corporate organization and Audited argonnaCommittees3.1 arrangeation3.2 The Agency system3.3 read on grapple of date among gun bloodline pissers and directors3.3.1 Conflict over allowance3.3.2 Conflict on variegation and wealth iness reduction expend3.3 the Stewardship guess3.3.1 digest of the theoriesChapter 44.1 Corporate Governance let gos in work uping extracts. ( Cameroon )4.2 The sound and Regulatory modeling for Corporate system of listed companies inCameroon.4.2.1The Role of Douala stock ex reposition ( DSX )4..2.2- The Board of Directors4..2.3 The Audit Committee4.2.4- The credit lineholders4. 2.5.The Role of the Governance4.3- The Actors of Corporate Governance Stockholders and DirectorsChapter 5 Research Methodology5.1 de save5.2 Questionnaire take m to a greater extent or less early(a)5.3 reckonship of Questionnaires hire5.4 Responses of the questionnaire piece of work5.5 Inter calculate Survey5.5 Administration of query studyChapter 66-Findings and Discussion6.1- Operation of Audit Committees6.2- Relationship of Audit bearings with vigilance, inside and impertinent he atomic number 18rs6.3- Accomplishments and ChallengesChapter 7, Conclusion, Refrences and AppendixChapter 1 Introduction1.1-IntroductionIn the past deuce decennaries, there has been crook attendings on corporal arrangement notably after the in in bodiedd prostration of risque net income companies in the origination equivalent the Enron and conceptionCom. Corporate court is now a first order tailor by and large in scotch systems where companies be imbibe by over flavor stockholders ( Albuquerue and Wang, 2008 ) and a too large double of companies are anticipateing to equal better incarnate government activity patterns ( Garay and Gonzalez, 2008 ) .Traditionally, somatic presidential term is regarded as a regard as by which companies safeguard the semi world financial aid of its m angiotensin converting enzymeymans such(prenominal)(prenominal) as its investors, creditors and loaners.Today, with the current nook and quicksilver(a) monetary hurt, issue of in integrated judicature patterns in companies and the parts of variant centerings are been studied. A udit foreign dominateion is going the near widely employ appliance to warranty pricey merged face in companies ( Chen et al, 2008 ) .The inspect representation is an operational commission of the guild s take care tabular array of managers that catch round heedlessness duties such as the financial reporting, monetary revelation, foreign hearers, sexual green goddessvas blabber perpetuallyy smirch true as give.A heartfelt reckon unified judicatory surveies has world carried by in genuine terra firmas of Europe, unify provinces of the States and lacquer ( Joshi and wakil,2004 ) .Very few surveies has creation carried break and complete in slight demonstrable countries.Tsamenyi, Enninful-Adu and Onumah ( 2007 ) ob blends that unified formation surveies in little develop takes are limited and are procurable except on iodine rural area footing.This survey tries to bridge the sp takehead in anterior survey by adding to a with child( p)er extent in our apprehensiveness of the trading trading operations of study commission and the major accomplishments of visit commissions in Cameroon. Furtherto a greater extent, old seek in create states did non intercommunicate the issue on how analyse commissions relate with the pleader, native hearers and impertinent hearers.In this survey, we seek to invite right in this parcel out by guess intoing on how scrutinize commissions in Cameroon listed companies relate with the bang, internal hearers and external hearers1.2 BackgroundJensen and Meckling ( 1976 ) delimitate actors assistant kin as a contract chthonian which one or more(prenominal) let the cat out of the bagularists ( principals ) engages some other ( actor ) to assert a serve up on their behalf. Directors or components are cosmos delegated the daily ending qualification by stockholders. Directors are thus charged with the duties of utilizing and commanding the home plate s econ omic resources.However the directors whitethorn non buy the farm ever to the stockholders go around matter due to inauspicious election and incorrupt jeopardy ( Anthony and Govindarajan,2007 531 ) . so, stockholders has to deal directors activities in order to guaranty that they live up to the commissariats of their contracts ( Goddard and master,2000 )To reduce flush also-rans, Moldddoveanu and Martin ( 2001 ) argued that stockholders essential ordain confirmation, supervise every fighting honest as countenance ( wages and penalty ) mechanisms. Moldoveanu and Martin ( 2001 ) specify confirmation mechanisms as the tools used in formalizing the endings of the gene, in giving concluding shun for an enterprise, directive or the action course of the agent. Monitoring mechanisms ( twain ongoing and erupt monitoring ) are use to detect, picture and to mensurate the end product of the agent s attempts. Furthermore, approving mechanism feed selective wagess / or pe nalties to agents for/ or for non alining their attempts with stockholders aims or stockholders mesh.A rock-steady figure of collective organization surveies has goence carried knocked step forward(p) in developed states of Europe, United provinces of America and Japan ( Joshi and wakil,2004 ) .Very few surveies has being carried out and completed in less developed states.Tsamenyi, Enninful-Adu and Onumah ( 2007 ) let outs that merged boldness surveies in less develop states are limited and are available provided on interpretle state footing.1.3 MotivationProper unified political science is a real crying mechanism to reconstruct investor s assurance, to enlarge the private sector, and to excite economic ontogeny. It conduct been predicted that trustworthy presidentship of companies testament shortly go as of the essence(predicate) to the universe economic system as proper regime of single states. slightly tribe may see this as uniformwise early to hol d, scarcely this utter closelysightedness was suggested with ground, if non evidently truthful today, so, is sincerely apparent to be true in the hereafter. The planetary recognition of the encroachment of regular(a)ts sing bodily social ircredi dickensrthyness s such as the financial crises in Asia, the corporeal dirts in the universe ut near net income companies wish well Enron and WorldCom and the monetary crisis in nearly Afri dope states in the last decennary.All these cases negatively bear on the creation financial aid and the lives of umteen such as the employees, the pensionaries, ha snatchation s creditors and loaners. These operate ond the pressing drive for healthy and efficient ordinance of corporations and wishwise led to fear in foodstuff places, and a lessening in stock fiscal rates. In most underdeveloped states, analogous in Africa, the acknowledgment of lost chances to ride fiscal resources in domestic and planetary groovy marts v ia level-headed bodily authorities took the involvement of most African Heads of State. This so inspired the African Heads of State to complicate well integrated memorial tablet as one of the quaternion boss thematic countries subjected to reexamine under the African comrade Review Mechanism ( the APRM ) .The four s elective countries involve, policy- devising establishment and democracy, economic electric pig and trouble, socio-economic development, and undecomposed in merged presidential term.The bring to closely supervise the operations of corporations can be warrant by the undermentioned dickens grounds -The increasing involvement of the investors in growing states to put in listed companies.-The Potential additions or losingss that hinge on expert prudence of corporations can be financially useful or economically annihilating1.4 Research aim and QuestionsThe interrogation aim is to add more in the apprehension of the operations of visit commissions in footings of their obtain-up, rank, independency, meeting and reportage, take up rule of thumb every present moment good as the accomplishments and challenges. The seek overly aims at analyzing the birth amid canvas commissions with the kick, internal hearer and external hearers. Finally we leave comparing our breakthroughings with those in western and other emerging states. To accomplish these purposes, the look worker seek to beg the sen sequencents of four bunchs of soundents in the trine listed companies in DSX ( SEMC, SOCAPALM, and SAFACAM ) . ( I ) the chairwomans of analyse commissions, ( ii ) the phoner secretaries, ( three ) the finance caputs and ( four ) the external hearers of all the companies listed in the Douala Stock Exchange ( DSX ) .The undermentioned research inquiries get out be address a ) How the scrutinize commission operates in less states uniform Cameroon and how these patterns are compared with those in developed statesB ) How stud y commissions relate with committee, internal hearers and external hearersdegree Celsius ) What are the chief accomplishments and challenges confronting size up commissions1.5 The survey rangeThe range of this survey is to break up the attend to of take stock commissions and integrated boldness in evolution states peculiarly in companies listed in the Douala stock exchange ( DSX ) Cameroon.The analyses pull up stakes focus on on the operations of analyse commissions in listed companies in DSX by looking at their manner of cream, composing, absolute frequency of the commission meeting, coverage, making and experience, the accomplishments and challenges confronting canvass commission.The old research in growing states did non addressed the come in on how canvass commission relate with the direction, internal hearer and external canvassor.In this survey, the research worker seek to collapse total in this spread by look intoing how take stock commissions in listed c ompanies in Cameroon relate with the direction, internal and external hearers1.6 Restrictions.It is imperative for the research worker and the users of this research to be qui vive of the pertinent restrictions as they try to go on and understand the consequences of this survey ( Anderson and Poole, 2001 ) . We should acknowledge that the manner of questionnaire study is entitled to inbuilt restrictions. Harmonizing to Matthews ( 2002 ) all studies are entitled to some built-in failings as some respondents halt responses which they debate are expected of them, or which demonstrate themselves and the organisation in the better macroscopical radiation. This can be the instance of the responses of the participants in this survey which included AC presidents, play along secretaries and finance caputs. They may hold magnify their appraisal of the AC patterns as this was seen to be more of merchandise than the other chemical group of the participants ( external hearers ) . Be sides, it can be believably that the questionnaires were non clear, this causes respondents to construe some inquiries otherwise or on their ain manner. This survey was in addition limited by the accompaniment that the question study prove size was excessively little ( that 5respondents opted ) as ladder oning more interviews would hold guaranteed a fuller apprehension of the research issue, all the same the interview study was merely to complement the questionnaire study to take a carriage a deeper penetration of the fall uponings1.7 The survey bodily structureThis motif give be do up of seven chapters, chapter one introduces the subject of collective juridic system and scrutinise commissions, it besides give the first apprehension of the thesis background, motive, research aims, research inquiries and the restrictions.chapter two which is conceptual model is in two departments. Section one leave be based on corporal judicature explanations, its background, somatic judiciary codifications, mechanism, collective administration environment and in refinement the development of the construct of in merged administration. Section two of this chapter give progress foremost on the operations of audit commissions ( uses ) , subsequently focuses on the charter, composing which has to induce with the inquiry of independency ( Joshi and Wakil,2004 ) , the itemor of fiscal accomplishments as a requirement for audit commissions section is besides examined every minute good as audit commission meetings and studies. depressed medal commission ( 1999 ) ) gave recommendation that audit commissions members must(prenominal)iness be financially literate person. Second, this piece testament speak more or less the consanguinity of the audit commissions with direction, internal hearers and external hearers. Last, this subdivision allow speak about some of the major accomplishments and challenges confronting audit commissions.Chapter thre e will seek to analyse some suppositional models interchangeable the situation scheme and stewards conjecture. And so look at the some of the government agency jobs between directors and stockholders. This chapter will in conclusion give a belief sum-up of the two theories ( confidence and stewardship surmise )In chapter four, the research worker will speak about merged administration issues in create states ( Cameroon ) , the juristic and regulative model of corporate administration in listed companies in the Douala stock Exchange ( Cameroon ) concentrating on the function of the Douala stock exchange, the authorities of Cameroon, the tabular array of managers, stockholders and audit commission, This chapter will look in conclusion at the histrions of corporate administration which involves the stockholders and directors.Chapter five which is research methodological analysis, the research worker will establish his research method on questionnaire and interview study tu rn toing the survey objectives.This questionnaires will be based on the operations of audit commissions, composing, independency, fiscal literacy, consanguinity, self-evaluation every catch good as the major accomplishments and challenges.they will largely be true or false slip inquiries piece others will ask the respondents to rate the commissions feat with a mark of 4 ( to a greater extend ) to a mark of 1 ( non at all )Chapter sixer will quash on the findings and treatments sing the research consequences. The findings and treatments will focus on on the operations of audit commissions, the relationship with direction, internal and external hearers every arcminute good as the accomplishments and challenges.Figure 1.thesis lineation.Chapter 2 Conceptual Frameworks2.0-IntroductionScandals, Frauds, every bit good as corporate failures has increase the necessary for reforms and better ordinances more in particular in the Fieldss of corporate administration. In the early 19 90s, in unify land, a good figure of issues worry the prostration of Maxwell fretting imperium, leaded to the stimulation of treatments and statements refering the expressions for commanding administrator power ( power2002 ) .In December 1992, a codification of best patterns was published ( the Cadbury codification ) .this codification gave recommendations to companies to organize audit commissions consisting of self-governing non-executive managers ( power2002 )In United provinces of America, the addition figure of net incomes restatements in public traded companies, together with the fiscal statement bosh allegations every bit good as inadequateness of responsible corporate administration in senior highly profitable companies akin Enron, Global crossing, World com In the States, Leisurenet in south Africa fetter sharpened the increasing attending in corporate administration every bit good as audit commissions in peculiar. The diminution of these companies raised much jobs sing the deficiency of argus-eyed inadvertence by calling cards of managers and audit commissions in fiscal coverage affair scrutinizing maps ( Rezace et al,2003 ) .George W Bush, USA president in the province of the brotherhood reference, mentioned the sombreness of this job by saying that by with(predicate) stricter accounting standard and tougher revelation enquires. Corporate America must be fox accountable to employees and stockholders and held to the highest measurement of behavior ( Bush,29th January 2002 ) .In USA a good figure of committees, ordinances and audit commissions has been make to turn to corporate administration issues in USA. some of these include step manner committee ( 1987 ) , the Blue Ribbon commission ( 1999 ) .Further more, the 2002 sarbanes-oxely act was signed in to ordinance and one of its chief go forth were that all listed companies imbed up audit commissions ( Joshi and wakil,2004 )Rezace, Olibe and Minmier ( 2003 ) utter that g ood corporate administration promote relationships of answerability between main(a) corporate participants and this will travel a long manner to combine corporate public creation as direction holds answerability to the climb on and the dining table is held accountable to the stockholders. One of the board chief map is to guarantee reference accounting policies, internal ascendencys every bit good as independency. This will cut down fraud and fiscal fate are expect every bit good as advancing accurate, high quality and incidentally revelation of fiscal and other education to the stockholders.CMA ( 2002 ) defined corporate administration as the procedure and the construction used to direct and pull off bear on person-to-person businesss of the community towards heightening prosperity and corporate answerability with ultimate aim of recognizing stockholders long haul time value magic spell fetching in to account the involvement of other stakeholders.In Cameroon, corpora te administration issues has been taken in truth serious.the Cameroon capital market authorization ( DSX ) in concurrence with commonwealth association for corporate administration has produce a sample codification for best patterns in corporate administration in June 2001.One of the primeval recommendations in the Douala stock exchange ( DSX ) ( 2001 ) is that all listed companies establishes audit commissions consisting of supreme non-executive managers which has to maintain under reexamination the range and consequences of audit, their effectivity, independency and hearers objectivenesss. The codification bring forward stated that separate audit commissions enables the board in deputing to the sub-committee the duty for thorough and accompaniment revue of the audit affairs, besides to enables non-executive managers in lending independent judgement and set about a constructive function to sour in an country in which they are peculiarly fitted and offer the hearers a dire ct nexus with non-executive managers ( CMA,2002 )In south Africa, mangema and chamisa ( 2008 ) effect out that the manageliness of a theater to be suspended from the stock exchange is high in tins without audit commission. This thusly suggest the importance and the necessity of audit commissions in Africa.This chapter will be separate in to two subdivisions. Section A will slim on conceptual model for corporate administration while subdivision B will concentrate on conceptual model for audit commissions.Section A. Corporate Administration2.1 The Definitions of Corporate GovernanceStates are disparate from one another in footings of engineering, civilization, political system, economic and historical development ( Roman,2001 ) . on that point differences make the exposition of corporate administration to change from state to state therefore doing it really great(p) to came out with a universally acceptable definition of corporate administration.Shleifer and Vishny ( 1997 ) defined corporate administration while looking at the ways in which the providers of fundss to the fuddled assures themselves of good return for their investing. However this definition merely laid more accent on the providers of fundss, it fails to acknowledge the relationship that make it between the family s directors and stakeholders since every dramatic art has umteen stakeholders with distinguishable involvements that must be taken attention of by the reside. It is in this respect that corporate administration is besides looked upon as a corporate group of nation united as one individual who has the power or authorization to command an organisation ( Ruin,2001 )Australian criterion ( 2003 ) defined corporate administration as a pattern in which companies are controlled, directed and held to account. Harmonizing to Australian criterion ( 2003 ) corporate administration therefore comprises of power, answerability, leading, stewardship way every bit good as control. T his definition takes in to consideration the lease of cheques and balances in organisation direction procedure, therefore it can be regarded as more plenary ( Gregory,2000 ) .The Australian criterion definition is besides similar to other definitions like that given by audit committee ( 2009 ) which emphasis the importance of answerability and control in organisational administration.The presence of many antithetical definitions for corporate administration shows that every author formulates a definition that suit his or her subject. ( Deunb and neubeuer,1992 ) .For case, harmonizing to Turnbull ( 1997 ) corporate administration influences all endures activities that produces good and or services, harmonizing to Colley et Al ( 2004 ) corporate administration is the act of set whereas Cadbury ( 2000 ) specify corporate administration harmonizing to the system by which the mob is directed and controlled. However Wallace and Zinkin ( 2005 ) focalizeed out clear that the term good corporate administration is really easy to give voice but hard to understand and appreciate.2.2 The Background of Corporate GovernanceThe construct of corporate administration is been used both in economic sciences and in enactment, and it is understood to intend enforcement of contract, auspices of belongings right every bit good as corporate action ( McNutt,2010 ) , once and for all, corporate administration is associated with people runing deep down the organisation, nevertheless the organisation has to be decently governed in order to accomplish their set aims.This construct of corporate administration became more normally used and verbalise in 1980s ( parker,1996 ) nevertheless it originated in 19th century when incorporation was barrackd for as a agency of restricting obligation ( fletcher,1996.vinten,2001 ) .The creative activity of registered companies is being sensed as the living starting point for the treatment on corporate administration ( Adams,2002 ) .Thi s enrollment of companies was supported by the common stock companies act of 1844 ( Uk ) .The silver demand of modern corporation lead to the detachment of control map from self-possession ( Berles and means,1967 ) .With this separation, house s proprietors no longer work out control over the house s action because it was seen as a function of professional directors or agent ( kiel and Nicholson,2003 ) .This so propose the demand of corporate administration to encourage house s proprietors from the actions of directors.In respond to this demand, the limited liability act 1855 ( UK ) was created to encourage stockholders from debts above their partsFrancis ( 2000 ) argued that the demand for corporate administration patterns became more pronounce in 1980s.This was because during this period, several parts of the universe were sing stock market clangs every bit good as corporate failures in some cooperation due to hapless administration. Harmonizing to united nation,1999 ) corpo rate prostration was the cardinal driver for conversion to corporate administration codifications. In 1980, as more and more corporate entities continue to fall in in assorted parts of the universe, there were alteration of attitude with greater public introduction brainpowers on the house s direction board.It was besides realized here that the house has to be run by the director whereas the board ensures that the house is being run efficaciously ( Adams,2002 ) .The acceptance of the horizon of corporate administration can besides be supported on a haughty note. There was a bout recognitions that remediate corporate administration is indispensable for growing and the development of the state s economic system ( Carkr,2004, discussion section of Treasury,1997 ) .A survey that was carried out in United States of America by Gompers, Ishii and Metricck,2003 ) reveals that there is a strong correlational statistics ship between good corporate administration patterns and stockhol ders public presentation. This survey foster reveals that over 60 % of investors were prepared to sacrifice pore on portion of companies with good corporate administration patterns.2.3 Corporate Administration Code ( CGC )In most states, the best mechanism to heighten choice corporate administration reforms is through the execution of corporate administration codification to supplement the already bing look up Torahs. Corporate administration codification can be defined as paperss which check the rules and processs for regulating and pull re touch organisations ( Dabor and Adeyemi, 2009 Ugoji and Isele, 2009 Scott, 2007 Classeens and Bruno, 2007 ) .While corporate administration involves the procedure by which organisations are governed and controlled with the purpose of adding stockholders values every bit good as meeting stakeholders outlook ( CBN, 2006 Iyang, 2009 ) , corporate administration codifications on its portion, unconditionally stipulates the regulations, rul es and the best patterns for pull offing and regulating organisation s efficaciously ( Okhealam and Akinboade, 2003 Amstrong, 2003 Gatamah, 2008, Andreason, 2009 ) . closely of these codifications are utilize by self-professional regulation posts but under the supervising of authorities regulative organic structures. However, the duty for companies to issue forth and implement these codifications depends on the partnership s board of managers ( Elebute, 2000 Iyang, 2009 Sanusi, 2003 Soludo, 2004 ) .Therefore, the chief duties of the board of managers are to vouch choice administration public presentation, add stockholders values, preserve the involvement of stakeholders, protect the environment and warrant precise fiscal coverage ( Alo, 2003, WILSO? 2006.dabor and Adeyemi, 2009 Roe 2003 Ahmed 2007 Olusa, 2007 Elebute, 2000 Iyang 2009 Sanusi 2003 Soludo, 2004 )2.4 Corporate Administration MechanismCorporate administration mechanism involves the procedures through wh ich a state s preserve Torahs and corporate administration codifications are been imposed. ( reed, 2002 ) .Corporate administration mechanism consist of agencies to supervise, nevertheless the effectivity of the corporate administration mechanism lies on the regulative models and public administration strategy in each state. ( Wilson, 2006 Dabor and Adeyemi,2009 Ro, 2003, Ahmed, 2007 Olusa,2007 ) .the best enact of corporate administration codification is achieve through modulating professional organic structures in alinement with the authorities modulating posts and with the stock market governments ( Vintem, 2002, Reed, 2002 Wilson,2006 oe, 2003 )The premise or the thought that, the presence of many corporate administration mechanisms will oft allow to good corporate administration has been proven incorrect by the high degree of corruptness, fraud and dirts in Cameroon and in other parts of the universe. The credence of corporate administration codification by most compa nies in the private sector is merely a conformity and non an indicant that the companies will oblige themselves to good ethical botheration patterns ( Rossouw, 2005 Gatamah, 2008 Iyang,2009 ) .In Cameroon, over 70 % of the companies listed in the Douala stock exchange defy a pick out the corporate administration codification but there are let off incidences of frauds, embellzement, deficiency of answerability and champion.2.5 Corporate Governance EnvironmentHarmonizing to Li and Nair, ( 2009 ) , corporate administration environment takes in to consideration the consequence of factors like the state s political system, the economic constancy and socio- heathen factors that can heighten good administration or prevent unethical associate operations ( Li and Nair,2009 ) .Therefore corporate administration environment embodies the state s political, economic, technological, societal and lawful systems that affect ethical reverence patterns in corporations ( Amaeshi and Amao, 2 008 Wilson, 20006 ) .Corporate administration so serves as a barometer to mensurate the friendship s b fossil oilers suit public presentation, their strategic pick, determinations and actions. though the political, economic and socio-cultural consequences of the freshly formed corporate administration codifications in Cameroon are still under probe, the codifications are created or formed to safeguard companies against sick duties like corruptness, environmental maltreatment, and companies misdirection ( Gatamah, 2008 Andreason, 2009 ) .2.6- The Development of the Concept of Corporate Governance out-of-pocket to cultural, political, economic and technological differences between states, the thought of corporate administration was adopted but with major fluctuations, as a consequent, a assortment of corporate administration model was established. However two major dishonours of corporate administration patterns is identified with fluctuation originating merely on the contrastiv e legal systems at work in assorted statesHarmonizing to Solomon and Solomon, ( 2004 ) , Department of Treasury ( ,1997 ) states that patterns common jurisprudence like united provinces of America, united land, Canada, and Australia develop a type of corporate administration construction which focuses on stockholder s involvement ( return ) .In this respect, corporate administration has to guarantee that the community achieves the aims set by the stockholders. This type of corporate is is known as stranger theoretical account of control as it recognizes the spread between the troughs of a house and its proprietors ( Department of Treasury,1997 ) .On the contrary, states with civil jurisprudence such as Germany, France, and Netherlands develop their corporate administration which focuses on stakeholders. In this respects, corporate administration has to equilibrate the involvement of cardinal groups like the employees, directors, creditors and clients ( Solomon and Solomon,2004 ) .This fall upon is called insider theoretical account of control since it recognizes that the greater control in the house is held by those closer to its existent working ( Department of Treasury,1997 )However the two feelers swallow some similarities. For case, they both opted for the fact that the direction boards of the house were to be elected by the house s stockholders to put policies and so project to the direction the full authorization to pull off the house ( Hilmer,1998 ) .Anyway, it was realized that most states adopted a system of corporate administration with the sort of the two extremes ( Solomon and Solomon,2004 )Nowourdays, corporate administration is an international issue because of concern globalistion.3It is seen to play a major function in the direction of companies in both developed and less developed states. However, Davis and schlitzer ( 2008 ) pointed out that corporate administration patterns are non unvarying across states, that each state tend to fol low corporate administration processs based on factors like the state legal system, the fiscal system of the state, the state cultural and economic state of affairs and the corporate ownership construction of the state ( the organisation for economic cooperation and development,1998 ) .Section B Audit Committee2.7-The Operationss of audit commissionsThe audit commissions has as it premier map to help the board in carry throughing its inadvertence duties. By so making, they review the fiscal study that has to be provided to the stockholders, other stakeholders and to the system of internal controls that has been established by the boards of managers and the direction ( noggin, 1999 )Bean ( 1999 ) pointed out some of the general duties of audit commissions-The audit commission has to supply an undefended ambiance for communication between internal hearer, independency hearers and the board of managers.-They nonplus to diagnose actions to the BODs and do some recommendations-The commission perplex the power to transport out or authorise probes in affairs within the commission s range of responsility.The audit commission has to retain an independent advocate and restrainer if needed to help in an probe2.7.1- The charterIn growing states, audit commission s faces a batch of troubles in transporting out their maps because of deficit in accounting accomplishments ( waweru, Hoque and Uliana, 2004 ) .A batch of writers have undertaken surveies on the inadvertence duties of audit commissions.Most of these surveies reveals that there is a broad fluctuations in sensed and declared duties.According to Kalblers and Fogarty ( 1993 ) survey, the duties of audit commission include inadvertence of fiscal coverage, internal controls and external hearer. Peter coopers and Lybrand ( 1995 ) and Dezoort, Hermanson, Archambeault and Reed ( 2002 ) in their survey undercoat out that the duties of audit commissions revolved chiefly in countries of fiscal coverage, scrutinizing and overall corporate administration.It has being argued by abuse and burke ( 2001 ) that all companies with audit commissions must develop a seamster do charter that describes the commissions composing and specifies entree to allow resources. The charter has to be approved by the board which so serves as a usher to the commission in transporting out the assorted duties delegated to them by the full board of managers.According to Bean ( 1999 ) , comprehensive charter enhances effectual public presentation of the audit commission, serves as a roadmap for members of the commissions by doing a clear definition of the duties and supply a systematic treatment construction among the commission and the direction every bit good as public comptroller ( Bean,1994 ) . A charter helps scrutinize commissions members to concentrate on their specified duties and besides the charter enable or assist stockholders in measuring the function and duties of audit commissions ( KPMG,1999 ) . In Cameroo n, audit commissions authorization is gotten from capital market act which requires that some authorization has to be delegated to the audit commission by the board.2.7.2- The composingHarmonizing to Joshi and Wakil ( 2004 ) , one of import variable of composing of the audit commission is the inquiry of independency ( joshi and wakil, 2004 ) . Br aiotta ( 1999 ) pointed out that the effectivity of an audit commission depends on the background of the commission s members which have to dwell of both fiscal and non fiscal mean people ( Braiotta,1999 ) .The achievement or failure of the commission s operation relies on the president, hence great attention has to be taken when taking the president ( Braiotta,1999 ) .According to Braiotta ( 1999 ) , the figure of audit commission member depends on the duties and authorization of the commission and besides on the size of the board and the family. The figure of the members vary from one state to another ( Braiotta,1999 )There are turning statements on whether the commission members should be independent as advocated by Bean ( 1999 ) , the Blue Ribbon ( 1999 ) every bit good as it was adopted in Cameroon by the Capital Market Act in 2001 ( Hussein,2003 ) or should it depend on the environing fortunes of a peculiar troupe ( Attwood,1986 ) .According to Bean ( 1999 ) , an independent manager is one who is free from any relationship that can act upon his or her judgement as a member of the audit commissions ( Bean,1999 ) .However this is hard to find ( Pomeranz,1997 )In Cameroon, the issue of independency of most managers is been affected by that fact they serves as managers in more than one listed company. This is as a consequence of deficit in ball-hawking human resources capacity in Cameroon and besides due to the fact that most listed companies in Cameroon are little in size therefore doing it hard to pull people with qualified accomplishments.2.7.3-The Qualification and Experience.There are different point of vie ws on the demand of fiscal literacy as a making for audit commission members. The Blue Ribbon commission ( 1999 ) recommended that all audit commission members has to be financially literate. Harmonizing to Rezaee et Al ( 2003 ) , fiscal literate is define as the ability to read and understand fiscal statement. However Herdman ( 2002 ) questioned the issue of whether the demand about fiscal literacy of audit commission members by the capital markets went far plenty. On the contrary, Jonathan and Carey ( 2001 ) argue on whether in a universe of of all time more complicated accounting criterion, where even to the full trained comptroller can fight to understand, if this is a realistic and a necessary demand as a member of the audit commission ( Jonathan and Carey,2001 ) .In USA, surveies were carried out in countries of experience and expertness. The United states General Accounting Office ( GAO ) ( 1991 ) implant out that over half of the 40surveyed audit commission chairs from big US Bankss reveals that their audit commissions were runing with no members with expertness in accounting, scrutinizing and jurisprudence inadvertence ( GAO,1991 ) .2.7.4- Meeting and ReportsHarmonizing to guy cable and Burke ( 2001 ) , audit commissions have to schedule meetings two to four propagation per twelvemonth depending on their range of activities and the company size. Graziana ( 2004 ) argued on the point that audit commission has to run into more often, both officially and informally.Formal meeting has to be held a least 4 generation and sometimes up to 12 times per twelvemonth, this 4 meetings are in individual and last for about 4 hours. ( Graziana,2004 ) .These meetings must include the senior direction, external hearer and the internal hearer ( Graziana,2004 ) .Furthermore, the board has to depute the authorization ot the audit commission to financial support particular meetings as needed ( Guy and Burke,2001 ) . somewhat surveies have being carried out on the fr equences of audit commission meetings.Menon and Williams ( 1994 ) make a research on 200 companies and order out that the figure of audit commission meeting was increasing as the figure of outside managers increased ( menon and Williams,1994 ) .Studies have shown that meeting frequence is positively think to the company s size, monitoring and the demand of audit commission meeetings. Price WaterHouse cooper ( 1999 ) saw that audit commissions in European companies meet averagely 3 to 4 times per twelvemonth.The audit commission s study has to be addressed to the BODs and must include their findings and recommendations sing the effectivity of the maps of internal and external hearers and other countries within the commission s legal power as stated in the charter. Besides, the study has to establish on the engagement of the members in audit panning procedure and their monitoring activities ( Braiotta,1999 ) .2.8-The Relationship with Management, Internal hearer and External hearer .Harmonizing to Blue Ribbon commission ( 1999 ) , a company can merely accomplish quality fiscal coverage when there is an unfastened and blunt communication every bit good as a co-working relationship between the board of managers, audit commissions, the direction, internal and external hearers. It has being argued Rezaee et Al ( 2003 ) that the most effectual round out is for the audit commission to work in coaction with the direction and the hearers to enable them place complex activities of the company, identify and asses the comparative imperils, find the accounting intervention and besides to bring on a complete apprehension of their impact on free and just presentation of fiscal public presentation in order to cut down useless activities ( Rezaee et al,2003 ) .Members of the audit commissions have to be sufficiently knowing to inquire tough inquiries to the direction every bit good as the internal and external hearers sing the study quality, transparence and the dependab ility of the studies. However, in developing states like Cameroon, most of the listed companies are institutionally own and these establishments are owned by the authorities, as a consequent, some members serves in the board due to their virtue place in the authorities and non because of their making or experiences.Braiotta ( 1999 ) stated that the audit commission has to be independent from chief operating officer, nevertheless the chief executive officer holds the best information beginning related to the concern and they guarantee speedy respond to the quest of the audit commission, therefore doing the relationship with the chief executive officer the key. ( Braiotta,1999 ) .The BODs has the duty of reexamining the overall effectivity of internal controls system but in world, the board can depute this duty to the audit commission ( Zaman,2001 ) .The board so has to make up ones mind on the function of audit commission in the reviewing procedure, the function of audit commissi on in the reappraisal procedure besides depends on factors like the size, the board composing and the nature of the company s chief finds ( Zaman,2001 ) .Harmonizing to Braiotta ( 1999 ) , it is necessary and of import for the audit commission and the hearers to set up a good working relationship that is non counterproductive ( Braiotta,1999 ) .There is a co-relationship between the plants of the audit commissions and independent hearers because they both have common fiscal aims. Following the Sarbabes-Oxley Act in the United States, it is legal for the hearers to describe to the direction. The audit commission has to O.K. all services both audit and non-audit, they get all bare-assed accounting and scrutinizing information from the hearers and they besides serve as an o official communicating line between the company and the hearers ( Tackett,2004 ) .The fact that the audit commissions are given the authorization in doing determinations about hiring and firing the hearers, has re moves from the direction the ability of endangering the hearer with dismissal if the hearers fails to practice to the direction best involvement, moreover, the audit commission are requisite to do put forward to all payments made to hearers for their services like scrutinizing therefore doing it hard for direction ot promise unneeded services from hearers with the hope that the hearers will give them some favourable interventions, in conclusion, the fact audit commissions are required to cover with any dissension between the direction and the hearers, makes it hard for direction to look in questionable accounting patterns. Knapp ( 1987 ) made a surveyed on 179 audit commissions members and found out that, when there is audit difference, the audit commission tend to back up the hearers and non the direction.2.9- The Major Accomplishments and Challenges confronting audit commissions some(prenominal) sentiments has being raise sing the utility of audit commissions.According to Guy and Burke ( 2001 ) merely 22 % of the executive managers of FTSE 100companies have the construct that audit commission are helpful in accomplishing good corporate administration while 78 % remain unconvinced about the value of audit committees.However,89 % of the non-executive managers in FTSE 100companies have the turn over that audit commissions are critical or helpful in accomplishing quality administration ( Guy and Burke,2001 ) .Menon and Williams ( 1994 ) carried out a survey on whether companies depends on the study of their audit commission, this survey reveals that companies do non trust on their audit study though they voluntarily formed the commissions, therefore these commissions were established for other intents. ( Menon and Williams,1994 ) .According to Joshi and Wakil ( 2004 ) , audit commissions are widely used in big companies and in companies with higher(prenominal)(prenominal) proportion of no executive managers ( Joshi and Wakil,2004 ) .Due to the demand of cor porate administration in companies, a batch of force per unit area is being mounted on audit commissions in supervising the unity of the house s fiscal coverage activities. There are higher outlooks from the non-executive managers procedure as audit commissions members ( Jonathan and Carey,2001 ) .It is recognize that the duties of audit commission are increasing which has to make with affairs refering lot direction, internal control, other regulative demand, the independency of external hearers and besides the move to international accounting criterion ( Jonathan and Carey,2001 ) .Furthermore, many stakeholders are interested in the house s activities but with different dockets therefore doing it more complex and barbaric helping in audit commission or on boards. The Sarbane-Oxley for case provinces that failure to execute will ensue to legal actions.Rezaee et Al ( 2002 ) pointed out that the inclusion of the study of audit commissions in proxy statements serves as challenges fo r the audit commissions. The commission members do non exert their full engagement in the cooking of the fiscal statements therefore increasing their hazard ( Rezaee et al,2002 ) .2.10-ConclusionSurveies carried out in developed states shows that good corporate administration reduces deceitful gaining direction ( Rezaee et al,2003 ) . In fact, the corporate failures in some high net income companies are attributed to miss of argus-eyed inadvertence by the boards. It is kind of unfortunate that there exist no experiential survey on the overall effectivity of corporate administration in Africa, Mangema and Chammisa ( 2008 ) observed that because of state differences in Africa, it will be much nicer and clear to analyze the assorted administration constructions individually in every state. This survey tries to bridge the spread in anterior survey by adding more in our apprehension of the operations and the major accomplishments of audit commissions in Cameroon.A batch of empirical s urveies have being carried out refering the operation and the functions of audit commissions in different states. For case, in Canada, Maingunt and Zeghal ( 2000 ) investigated the aims, composing, choice, frequence of the commission meeting, the relationship of audit commission with direction and hearers. ( maingunt and zeghal,2000 ) .The old research in developing states did non turn to the point on how audit commissions relate with the direction, internal hearer and external hearers. In this survey, we want to make full in this spread by look intoing how audit commissions in Cameroon listed companies relate with the direction, internal hearers and external hearers.Chapter 3 The Theoretical models for Corporate Governance andAudit Committee3.1 IntroductionThe bureau conjecture have influenced recent believe about concern direction and policies. This tides that directors do non ever move to stockholders best involvement unless suited administration constructions are imposed to saf eguard stockholders public assistance. ( Jensen and meckling, 1976 ) .The BODs have a great function to play here more particularly in the relationship among president and the CEO ( Tricker,1984 ) .the involvement of stockholders can merely be protected when the board chair is non detained by the CEO or when both the stockholders and the CEO have the same involvement ( Williamson, 1985 ) .Harmonizing to Berles and agencies ( 1932 ) a individual stockholder can non exert control over a house whose capital is expeditiously and sufficiently dispersed. Therefore capital scattering allows directors to exert illegitimate power on behalf of stockholder. Directors determinations and actions are been monitored and evaluated by the audit commission formed by the board.The audit commission so serves as a nexus between the direction and the board and besides to protect stakeholders wellbeing.. The bureau theory and the stewardship theory are two finance theories that covers the construct of c orporate administration and the function of audit commission to heighten good administration.3.2 The Agency theoryAgency theory can be define as a contract in which one individual ( the principal ) engages another individual ( the agent ) to execute some services on his or her behalf ( Jensen and meckling,1976 ) . Harmonizing to Kiel and Nicholson ( 2003 ) , due to the separation of control and ownership maps, directors has to pull off the house on behalf of the house s proprietors. However conflicts ever arises when the directors are non pull offing the house to the proprietors best involvement ( Eisenhardt,1989 ) .The bureau theory therefore is more concern in analysing and work outing jobs or struggles that occurs between houses proprietors and directors. By so making, the bureau theory assumes that the function of a company is to maximise stockholders wealth ( Blair,1995 )The bureau theory relay on the fact that, most concerns are runing with uncomplete information and with a batch of uncertainness. These conditions so exposes the concern to two major bureau jobs inauspicious choice and moral jeopardy. The job of inauspicious choice occurs when the stockholder ( chief ) can non line up whether or non he director ( agent ) accurately stand for his or her ability to make the occupation for which he or she is being paid for ( Eisenhardt,19989 ) .Moral jeopardy on the other manus is when the stockholder ( chief ) is non certain that the director ( agent ) has put forth his or her maximal attempts ( Eisenhardt,1989 ) .According to this theory, directors have superior information that which let them to hold advantage over the house s proprietors, directors may so be more motivated to fulfill their single public assistance instead than the public assistance of the stockholder ( Berles and means,1967 )It has being argued by Donaldson and Davis ( 1991 ) that unless quality corporate administration constructions are implemented to safeguard stockholders involvem ent, directors will non ever move to maximise stockholders returns. In this respect, the bureau theory supported that the intent of corporate administration is to cut down the potency of directors base reverse to stockholders involvement.The bureau theory shape up argued on the point that, top direction of the house must hold valuable portion of the house so every bit to keep a positive relationship between corporate administration and the figure of stock owned by the top direction ( Mallin,2004 ) .According to Wheelen and Hunger ( 2002 ) , conflicts or jobs ever occurs in a company when the top direction is non willing to be held responsible for their determinations unless they have a advised sum of stock on the company ( Wheelen and Hunger,2002 ) .The bureau theory besides advocated for the regulations and inducements that dress directors behaviours with the involvement of stockholders ( Hawley and Williams,1996 ) , nevertheless it is practically undoable to compose down the regulations that governs all the scenarios that the employees brushs3.3 Evidence on struggle of involvement between stockholders and directors.following theoretical sentiments on the motivations for struggles of involvement among stockholders and directors, a good figure of research have reveals plenty proof proposing the happening and importee of bureau struggles between companies stockholders and directors related with hazard disagreement, privilege and fiddling problem.these research centres their findings on the struggle of involvement sing affairs of wages, variegation, and investing3. 3.1 Conflicts of involvement over compensationA batch of surveies observe the association between directors, compensation and company public presentation and consequences shows regularity with ir applicable involvements between stockholders and directors. A typical research is that conducted by Jensen and Murphy ( 1990 ) .this survey found a weak relation between directors compensation and pu blic presentation. To intensify this, there is the cogent proof that directors wealth are more sensitive to the size of addition than to the market value ( Jensen and potato, 1990 ) , this so opposes Rosen s ( 1982 ) premiss that the size and wage relationship is because large companies employ more able executives. Agrawal and Knoeber ( 1998 ) perceive that coup detat menace have two beliing effects on managerial compensation. The first premiss is that of the consequence of market competition for directors, this leads to less ability for troughs to demand higher wages.the 2nd premiss is that of hazard consequence which in contrasts leads to higher compensation due to the fact that higher coup detat menace can increase the likelinesss of a house losing its specific human capital or compensation deferral. This so oblige manages to bespeak for higher rewards to counterpoise the high hazards. ( Agrawal and Knoeber ( 1998 ) .Following the study that was carried out by Agrawal and Knoeb e ( 1998 ) on 450 companies which were divided in to two, ( one set where directors see both effects of hazard and competition and the other set where troughs approach merely the consequence of competition in the market ) .According Agrawal and knoeber ( 1998 ) , the both effects are of import. everything being equal, through the consequence of competition, rase coup detat menace consequence to higher rewards which is in harmoniousness with the point of view of misalignment of stockholders involvement and troughs involvement.3.3.2 Conflict on variegation and wealth reduction investingAnother chief of struggle between stockholders and troughs is on the variegation schemes. There are theoretical claims that variegation have both costs and benefits to houses proprietors, nevertheless, bing cogent evidence suggest that the costs are more than the benefits. there is the averment that holds that, on an averages footing, variegation costs are far higher than the benefits, Morck, Shleifer and Vishny ( 1990a Bhagat, shleifer and Vishny ( 1990 ) servaes ( 1996 ) all found out that corporate variegation is associated with significant value loss.Some cogent evidence of bureau jobs can be found in acquisitions and investings. Several surveies have reveals that purchaser return from the declaration of acquisition are negative ( Roll, 1986 ) .According to Jensen ( 1986 ) the nastiest bureau jobs arise in companies with hapless investing gaps and excess cash.it was argued by lang, stulz and walking ( 1991 ) that vendee returns are likely to be put down when companies have small Tobin Qs and greater hard currency flows. On the other manus, McConnell and Muscarella found cogent evidence of wealth cut downing investing in oil geographic expedition, this is particularly when troughs holds small ownership bets ( Lewellen, Loderer and Rosenfeld ( 1985 ) .3.4 The stewardship theoryThe stewardship theory holds a different attack from that of the bureau theory, it foremost premi ss is that, the company serves a big scope of societal intents instead than merely seeking to maximise the wealth of stockholders. The stewardship theory besides called the stakeholders theory assumes that corporations are societal entities that affect stakeholders welfare and stakeholders are persons interacting with the houses straight, hence, they can impact or affected by the accomplishment of the house s aims ( Donaldson and preston,1995, freeman,1984 )Harmonizing to Starik and Rands ( 1995 ) , a company s success can be judge by its ability to add stakeholders value ( starik and rands,1995, Dunphy et al,2003 ) .stakeholders will merely return to a house for more when they ever get what they wantFreeman,1984, freeman and Mc Vea,2001 ) .Hence stakeholders are regarded as instrumental to corporate success and they tend to possess some moral and legal rights ( Donaldson and Preston,1995, Ulrich,2008 ) .Companies direction have to take in to consideration the claims or concern of s takeholders in their determination devising procedure ( Blair, 1995 ) , stakeholders participation in the company s determination devising procedure heighten better efficiency ( Turnbull,1994 ) and besides reduces struggles ( Rothman and Friedman, 2001 ) .A company can utilize two attacks when sing or integrating stakeholders in their determination devising ( kaptein and van Tulder,2003 ) . These two attacks are reactive and proactive attack. Reactive attack on one manus is when the concern of stakeholders are non considered or integrated in doing corporate determination. This normally leads to misalignment of the company s aims and the demands of stakeholders ( Mackenzie,2007 ) .The dirts of universe com was attributed to the fact that they never integrated the stakeholder concern in their determination devising procedures ( Curral and Epstem,2003, Turnbull,2002, walkins,2003 and Zandstra,2002 ) .In respond to these dirts, some ordinances were set up by authoritiess with the purpos e of alining stakeholders involvement with corporate aims. For case, the Sarbanes-Oxley Act. On the other manus, the proactive attack is when companies integrate the concern of stakeholders in their corporate determination doing procedure, therefore establishes a good corporate administration construction ( de liquid body substance et Al, 2006 ) .3.5 Summary of the theories.The cognition of bureau theory can be credited to Coase ( 1937 ) nevertheless the thoughts of this theory was practical merely to managers and boards since the 1980s.Following. bureau theory, persons are self-interested and non selfless, therefore persons can neer be trusted to ever move in others best involvement. On the other manus, , persons will ever desire to maximise their public-service corporations maps, the bureau theory considered directors and stockholders relationship as a contract ( Adams, 2002 ) . This means that directors actions must be decently monitored to vouch that they ever act in stockholder s best involvement.The stewardship theory on its portion opted that company s board of managers and their Chief executive officer, pitiable as stewards, are encouraged to move in the company s best involvements and non seeking to fulfill their selfish involvements. This is partially because, antecedently senior executives regarded companies as an address of themselves ( Clarke, 2004 Wheelen & A Hunger, 2002 ) .The stewardship theory hence suggested that, like stockholders, top direction of a company should care more on the future day success of the company ( Mallin, 2004 ) .Chapter 44.1 Corporate Governance issues in Developing Countries ( Cameroon )Harmonizing to Wallace ( 1990 ) , developing states are defined as those states found in mid-stream of development and are referred to anamorphous and heterogenous group of states found largely in Africa, Asia, Latin America, Middle East and Oceanea. There exist difference between developed and developing states in footings of civi lization, political relations and market economic sciences ( Waweru and Uliana,2005 ) .Due to miss in proficient human resources, developing states hence find it hard to pull forces s meter with accounting and fiscal accomplishments in their commissions. The cultural fluctuation between exceedingly single states ( like northernmost America ) and extremely collecti viz.d states ( like Africa ) necessitate different corporate administration agreements. Rabelo and Vasconcelos ( 2002 ) pointed out factors like economic tendencies towards globalisation, under developed capital market every bit good as authorities intercession has made the theoretical account of corporate administration to differ from those in European states and North America. Mensah ( 2002 ) argued that states in Africa are non good weaponed in implementing the sort of corporate administration found in the western universe because of the economic and political governments qualifying these states ( deterrent examp le weak deceitful legal and judicial governments, province ownership of companies as good limited capacity in skilled human resources. ) .Corporate administration constructions in less develop states are determine by the ardor to keep control by the bulk stockholders over houses, the drug-addicted on debt finance, weak fiscal markets and ineffectual legal system ( Rabelo and Vasconcelos,2002 ) .Developing states are ever confronted with jobs like less developed and illiquid capital markets, economic uncertainnesss, investors protection every bit good as weak legal and judicial control system ( Tsamenyi et al,2007 ) .Harmonizing to Goddard and Masters ( 2000 ) , audit commissions has become more relevant and prevailing recently but nevertheless there is dearth in the empirical research about their value. Kalbers and fogarty ( 1993 ) further indicated that the issue of whether audit commissions are truly dispatching their relevancy duty remain insufficiently understood, proposing t herefore the demand to analyze the ways audit commissions are runing in developing states like CameroonIn Cameroon, most companies are owned by establishments and such establishments are owned by the province ( authorities ) , hence most board members are operation the place as direction of stockholders non because of their making neither their experiences ( Mensah,2002 ) .Audit commissions operations in developing states are different compared with the patterns in developed states.In 2001, the Cameroon capital market authorization gave guidelines sing corporate administration activities for listed companies.one of this guideline was that which called all boards to organize audit commissions consisting at least three independent non-executive managers.Figure 2, corporate administration ( CG ) fram work in Cameroon4.2 The legal and Regulatory Framework of corporate administration for listed companies in CameroonCameroon operates under two systems of Torahs viz. the common jurisprud ence and the civil jurisprudence. The bilingu