Risk involve in trading at stock markets can be reduced by using some management techniques known as risk management, which includes,
- Audit and internal compliance process
- Corporate governance
AUDIT AND INTERNAL COMPLIANCE PROCESS
- System Audit in stock markets business is done for the purpose of ensuring of working with regulatory authority.
- Frequent conduction of audit of brokers in stock markets for confirming about the corporate governance.
- Assurance and consulting activities are conducted in Karachi stock exchange.
- Audit is done for ensuring about the ethical codes and corporate governance for self regulation.
- For improvement in the effective control of current governing and managing procedure in KSE.
- These periodic audits are also done for the purpose of getting reports about the law, tax and regulation details in Karachi stock exchange.
- These audits help the upper management to develop more efficient internal frame work.
- 12 month audit plan covers all the important activities conducted in exchange.
For conducting proper audit in Karachi stock exchange corporate governance bodies were established which includes,
- 10 members for the board of directors.
- 5 members of directors were elected.
- 4 non member directors were sent from the SECP, which are associated with the big business industries of the country.
- Chairman of the board is elected through the members who are not a part of members of board.