Internal audits conducted by credit institutions in Cameroon must comply with the requirements of COBAC Regulation R-2016/04. This regulation mandates strict independence of the internal audit function, the establishment of internal audit charters, and a direct reporting line to the Board's audit committee rather than to the executive organ so as to ensure objective and impartial risk management.
Reporting institutions must set up a second-level control or internal audit system. The organization of the internal audit function must make it possible to verify, at appropriate intervals, the regularity and compliance of operations and the effectiveness of first-level systems, in particular their adequacy in relation to the nature of all the risks associated with operations.
Regulatory & Institutional Framework
Regulatory Authority: The Central African Banking Commission (COBAC) supervises and dictates the minimum internal control requirements for Credit Institutions in Cameroon and CEMAC.
Compliance Requirement: Under COBAC Regulation R-2016/04, credit institutions are obligated to establish an independent internal audit function, the performance of which cannot be outsourced to third parties.
Independence: The audit department must report functionally to the deliberative body (the Board of Directors or Audit Committee) and administratively to the executive body.
Core Audit Areas
Credit Risk Management: Evaluates asset quality and monitors non-performing loans (NPLs) to mitigate the risk of internal fraud and prevent overall portfolio degradation.
Permanent Control & Compliance: This function reviews Level 1 and Level 2 controls, including compliance with Anti-Money Laundering and Counter-Financing of Terrorism (AML/CFT) directives as required under the National Financial Inclusion Strategy.
Information System Security: Verifies the accuracy and consistency of critical data feeding into core banking platforms and regulatory reporting systems.
Requirements of Reporting Institutions in Cameroon
Reporting institutions are required to draw up an internal audit charter which defines in particular:
The position, powers and objectives of the internal audit function.
The responsibilities of this function and the nature of its work.
The procedures for communicating the results of its audit assignments.
This charter is communicated to the general secretariat of the banking commission.