According to Regulation COBAC R-2016/04 relative to internal control in credit institutions and financial holding companies, it is compulsory for all institutions subject to the law to set up an audit committee.
As a cornerstone of corporate governance within Cameroonian credit institutions, the Audit Committee mandated by the Banking Commission of Central Africa (COBAC) safeguards internal control frameworks by supervising risk management, evaluating internal audit performance, and enforcing strict regulatory compliance.
Key Functions of the Audit Committee in a Credit Institution in Cameroon
Internal Audit Oversight: Evaluates the internal audit charter, authorizes annual audit schedules, and guarantees that the audit team possesses the structural independence and resources required to objectively assess institutional risk.
Risk Management & Compliance: Supervises the efficacy of internal control frameworks to mitigate fraud risks while guaranteeing strict adherence to COBAC regulations governing capital adequacy and liquidity ratios.
Financial Reporting Integrity: Reviews financial statements and management control letters ahead of their presentation to the Board of Directors to validate accounting precision and ensure absolute institutional transparency.
External Auditor Supervision: This body oversees the external audit process, reviews the findings arising therefrom, and ensures that management implements the necessary corrective measures in response to the recommendations made by the auditors.
Informatory Responsibility of the Statutory Auditor to the Audit Committee
In this respect, the statutory auditors inform the audit committee;
Their general programme of work and the various tests they have carried out,
Any changes which they consider should be made to the accounts to be approved or to the other compatible documents, making any useful observations on the valuation methods used to draw them up,
Any irregularities or inaccuracies they may have discovered,
The conclusions reached on the basis of the above observations and corrections.
Regulatory Framework in Cameroon
As a member state of the Central African Economic and Monetary Community (CEMAC), Cameroon's credit institutions are subject to the regulatory authority of the Central African Banking Commission (COBAC). The principal regulations governing the formation and duties of the audit committee include the following:
COBAC Regulation R-2001/08: Establishes the framework for internal control in credit institutions and financial companies.
COBAC Regulation R-2016/02: Outlines corporate governance requirements, specifying that the audit committee must be composed largely of independent, non-executive board members with financial expertise.
Why It Matters
In the Cameroonian banking sector, a robust and effective audit committee is essential to maintaining public confidence, mitigating the risk of Non-Performing Loans (NPLs), and stabilizing the broader financial system against regional economic shocks.