Amwaj International, listed on the Saudi Stock Exchange (Tadawul), announced a significant development in its financial governance, disclosing the results of an internal investigation that revealed substantial inventory discrepancies totaling SAR 28,662,257. This announcement followed the completion of a physical inventory count and a technical evaluation conducted by an independent external auditor, after financial and procedural irregularities were detected at one of the company's branches.
General context and importance of corporate governance
This incident highlights the importance of internal control systems and good governance in publicly traded companies. In an economic environment striving for transparency and attracting foreign investment, such as the Saudi market, prompt disclosure and decisive action in addressing such violations are indicators of market maturity and the strength of its regulatory bodies, such as the Capital Market Authority. Companies' adherence to international accounting standards and accurate disclosure is not merely a regulatory requirement; it is the cornerstone of building investor and shareholder confidence, as they rely on publicly available financial data to make their investment decisions.
Corrective measures and their expected impact
In its official statement, Amwaj International confirmed that it immediately initiated the necessary precautionary measures to strengthen its internal control systems. These steps aim to address the gaps that led to these discrepancies and ensure they do not recur. The company added that it is currently reviewing and verifying the balances of certain accounts receivable related to the branch in question, and affirmed that any further discrepancies discovered will be handled in accordance with accounting standards and applicable regulations.
This announcement is expected to have a direct impact on the company's stock performance in the short term, as investors tend to react cautiously to news of financial irregularities. However, the company's transparency in disclosing the issue and its swift response in taking corrective measures may contribute to restoring confidence in the long term. This event also reflects the Board of Directors and the Audit Committee's commitment to protecting the company's assets and shareholders' funds, and their determination to pursue all necessary legal and judicial actions to hold those responsible accountable and recover any of the company's rights.
