Regulation No. 04/03 on the Duties of Statutory Auditors in Credit Institutions

COMMUNAUTE ECONOMIQUE ET MONETAIRE DE L’AFRIQUE CENTRALE UNION MONETAIRE DE L’AFRIQUE CENTRALE COMITE MINISTERIEL

REGLEMENT N°04/03/CEMAC/UMAC/COBAC

Relatif aux diligences des commissaires aux comptes dans les établissements de crédit

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THE MINISTERIAL COMMITTEE

Having regard to the Treaty establishing the Economic and Monetary Community of Central Africa;

Having regard to the Addendum to the CEMAC Treaty on the institutional and legal system of the Community;

Having regard to the Convention governing the Monetary Union of Central Africa, particularly Articles 31, 32 and 34;

Having regard to the Convention of 16 October 1990 establishing a Central African Banking Commission;

Having regard to the Convention of 17 January 1992 on harmonizing banking regulation in Central African States;

Having regard to COBAC Regulation R-92/02 on the approval of statutory auditors for credit institutions;

Having regard to COBAC Regulation R-2001/07 on internal control in credit institutions;

Having regard to Act No. 5/82-UDEAC-324 of 18 December 1982 on statutory audit and judicial accounting expertise;

Having regard to the OHADA Uniform Act of 17 April 1997 on commercial company law and economic interest groups;

After the opinion of the Board of Directors of the Bank of Central African States issued on 1 July 2002;

On the proposal of the Banking Commission;

At its meeting of 23 September 2002

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ADOPTS

The Regulation whose text follows:

Article 1. Approved statutory auditors within the meaning of Article 20 of the Convention of 17 January 1992 on harmonizing banking regulation in Central African States exercise their duties within credit institutions under conditions set by existing laws, notably Act No. 5/82-UDEAC-324 of 18 December 1982 on statutory audit and judicial accounting expertise, the OHADA Uniform Act of 17 April 1997 on commercial company law and economic interest groups, and in compliance with this Regulation.

Statutory auditors referred to in the preceding paragraph may not perform any duties other than those mentioned in Articles 710 to 717 of the aforementioned OHADA Uniform Act within the institutions for which they are approved, and consulting activities that do not fall within the scope of this defined mission are specifically prohibited.

Article 2. When a credit institution is required to appoint two statutory auditors, they may not represent or belong to the same firm, the same company of statutory auditors, or the same network.

Article 3. Upon approval of annual accounts, statutory auditors must ensure that data transmitted to the Central African Banking Commission (COBAC) enables the preparation of financial statements giving a true and fair view of the period's results, financial position, and assets of the credit institution. They verify compliance with COBAC Regulation R-98/03 on accounting for doubtful debts and signed commitments. They ensure the relevance of evaluated received guarantees.

For institutions with total assets exceeding the threshold set by COBAC President's directive, statutory auditors' oversight extends to all management aspects contributing to institutional sustainability, such as credit portfolio quality, the existence of effective procedures and internal control, profitability, and the realism of forecast accounts.

Upon approval of semi-annual accounts, statutory auditors may limit their review to elements contributing to the formation of interim results for the period.

Article 4. Statutory auditors must promptly alert the COBAC General Secretariat upon discovering during their mission:

a) any fact likely to significantly influence the financial situation of the credit institution or its administrative, accounting, or internal control organization;

b) any fact constituting a violation of laws and regulations that could seriously affect the liability of the institution or its management;

c) any fact likely to result in refusal or serious reservations regarding account certification;

d) any fact likely to compromise the going concern status of the credit institution.

Furthermore, statutory auditors inform the COBAC General Secretariat when they trigger an alert procedure under Articles 150 to 156 of the OHADA Uniform Act of 17 April 1997 on commercial company law and economic interest groups.

In such cases, all correspondence and other documents related to this procedure are communicated to the COBAC General Secretariat.

Article 5. Professional secrecy is not enforceable against COBAC. The liability of statutory auditors cannot be invoked for information and disclosure of facts carried out in execution of Article 4 of this Regulation.

Article 6. Statutory auditors communicate to the COBAC General Secretariat any report addressed to the Executive or Deliberating bodies of the credit institution for which they certify accounts.

Statutory auditors may access, upon request, COBAC's verification reports concerning the aforementioned credit institution. They must also keep their work program and audit file available to the COBAC General Secretariat.

The COBAC General Secretariat conducts at least biennial exchanges of views with statutory auditors regarding the credit institutions under their supervision.

Article 7. In case of non-compliance with this Regulation by a statutory auditor, COBAC may impose sanctions provided for in Article 13 of the Annex to the Convention of 16 October 1990.

Article 8. The provisions of this Regulation apply to institutions covered by the Convention of 16 October 1990 establishing a Central African Banking Commission.

Article 9. The COBAC Secretary General is responsible for the execution of this Regulation.

Article 10. This Regulation, which enters into force on 1 July 2003, is published in the Official Bulletin of the Community.

Yaoundé, 14 MAY 2003

The President,

[Signature]

Michel MEVA’A m’EBOUTOU