3. Major elements of the company’s control environment

The following items can be referred to the elements of control environment to which the auditor should pay attention during the evaluation of the internal controls.

• Integrity and ethical values

• Board of directors and audit committee

• Management's philosophy and operating style

• Organizational structure, including assignment of authority and responsibility

• Commitment to financial reporting competence

• Authority and Responsibility

• Human resource policies and practices

Talking about the control environment of the company I can conclude that despite the fact that the company officially operates under the name JSC “Altyntau Resources” only from 2011 the management team of the company is strived for the creation and development of the strong control environment. At this moment the company has determined main priorities of its business activity and strictly follows them to accomplish the goal of becoming the biggest gold-ore producer in the Kazakhstan and further to take the leading position in the gold-mining industry in the world. The JSC “Altyntau Resources” has elaborated the code of conduct which is the base of the high standards of the corporate management of the company. The company pays special attention to its sustainable development adhering to the principles of increasing production through the introduction of innovative technologies to provide the safety and environmental protection.

One of the key issues in each enterprise is its management structure, which enable the company to run business smoothly through the delegation of activities to the specific departments and boards. The good-structured and efficiently organized management is important for JSC “Altyntau Resources” as well. The organizational chart demonstrates a big number of different departments of the company which share different responsibilities. The top of the chart is represented by the board of directors, where the chairperson and at the same moment the president of the company is Alidar Utemuratov. The activity of department of internal audit and financial control is regulated by the board of directors in order to ensure the company that all management activities are implemented carefully and in accordance with specified standards. As I mentioned before, safety and healthcare of employees is a very important aspect in the business of JSC “Altyntau Resources”. Every year the company spends a huge amount of money to provide workers, who is engaged in hazardous activity, with all needed equipment and annual medical examinations. The department responsible for the organization of employees’ protection named the Department of Safety and is located right at the top of the chart and is related directly to the president of the company. Then organizational structure is followed by the production, commerce, finance, development and administrative questions directors who are responsible for management of the different departments.

Talking about the commitment to the financial reporting competence I can conclude that the management team of the company is responsible for the preparation and the reliable representation of the financial information in the consolidated financial statements in accordance with the international financial reporting standards. Moreover, managers are responsible for the development of the system of internal control which is required for the preparation of the financial statements free of distortions and misstatements.