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.
The audit committee assists the decision-making body in overseeing the internal control system. It reports regularly to the board on the performance of its duties and informs it without delay of any difficulties encountered.
In particular, the audit committee must ensure that;
- The reliability and clarity of the financial information prepared by the executive body and the external auditors, and an assessment of the relevance and consistency of the accounting methods used to prepare the financial statements,
- The quality and effectiveness of the internal control systems, in particular the consistency of the systems for measuring, monitoring and controlling risks, and to propose any additional action required in this respect,
- Monitoring the statutory audit of the annual financial statements and, where applicable, the consolidated financial statements by the statutory auditors etc.
However, the existence of an audit committee does not relieve the deliberative body of its responsibilities as defined in the regulation.
The audit committee must analyze the main areas of risk or uncertainty in the annual or consolidated financial statements (including the half-yearly financial statements) identified by the statutory auditors, and assess their audit approach and any difficulties encountered in the performance of their assignment.
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.