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Public banks: external audit and ultra vires


The media reported the intention of the government to submit public banks (STB, BH, BNA) to an external audit, and international tender was launched since August 23 by the Ministry of Finance.

Professional organizations of accountants have protested against the international character of this call. Foreign firms would not have their eyes exercisability acts audit in Tunisia.

Able to audit the banks in which the state and public institutions are the majority shareholders begs a host of questions.

First, under which the Ministry of Finance is he legally entitled to commission an external audit on behalf of banks in the form of limited liability company own? A foreign firm did the legal right to audit in Tunisia? What credit can we give to the auditor’s conclusions? What are the guarantees of independence? So many questions that deserve answers. It is in good health Tunisian banks and the requirement of strict compliance with the law.

1-Excess of authority and breach of the Code of Commercial Companies

Indeed, art 18 of the Basic Law No. 6 from 16/12/2011 on the organization of government provides, inter alia, that the ministers exercise supervisory authority over public enterprises within their departments. It emerges that the Minister of Finance or, currently, the Secretary of State for Finance invested duties of Minister holds this authority vis-à-vis public banks to be audited. However, the supervisory authority does not grant the holder any way to any power management or administration of the agency subject to guardianship. Its scope is to ensure and monitor compliance and correct application of the law by the institution under supervision. Secretary of State for Finance Minister functions can not replace the administrative bodies of these banks.

In addition, pursuant to art 188 of the Commercial Companies Code, the company, as is the case of three banks to be audited, is administered by a board of directors or, as applicable, by an Executive Board and a supervisory board. Under Art 197, the Council “is vested with the broadest powers to act in all circumstances on behalf of the company.” At the end of each fiscal year, it must comply with the provisions of art 201, presented at a meeting of shareholders a detailed report on the management of the company. Chairman of the Board of Directors ensures, in turn, the general direction of the company (Article 211 of SCC). While the General Assembly is essentially under Art 274 of the CSC, a supervisory body for the management and approval of the accounts of the company.

The decision to submit the state-owned banks, namely limited liability companies, an external audit is probably not an act of leadership may be the responsibility of the head of it, that is to say, the P CEO, or management control or approval of the likely return of right to the shareholders’ meeting. It is a measure of excellence by which management can take up to the boards of these banks.

The Secretary of State the functions of the Minister of Finance, in deciding able to submit to external audit BH, STB and EPS exceeded its powers as provided by law on the provisional organization of authorities public and has violated the provisions relating to the powers of the CSC management bodies of the company.

2-Violation of the Law on the profession of accountancy

We raised also the question related to whether a firm abroad may be entitled to be entrusted with the audit of banks and Tunisian companies. There is no doubt that audit is not a simple point, it is expected to last over time, at least for some time, probably a few months. Also, it is characterized by its complexity and by the presence of fairly extensive staff undertaking the audit operations. From this point of view, it is similar to a normal exercise of the profession of accounting period, although “fixed-term”. However, the terms of Article 3 of the Law 108-88 require registration to the National Association of Accountants able to engage in the profession. Among the requirements, the candidate should be of Tunisian nationality for a minimum of five years. Moreover, a foreigner is able to perform the acts and conduct accounting in particular after an audit, among other things, the issuance of an authorization from the Minister of Finance in accordance with the holder of Foreign Affairs, following the opinion of the Board order.
It is clear that in principle a foreign public accounting firm is not automatically authorized in accordance with Tunisian law, to audit a bank or a company in Tunisia. Secretary of State for Finance in using a international tender for external audit of public banks broke the law on the profession of accountancy.

It should be added that the National Council of the College shall guarantee the independence and ethics of accountants in Tunisia. As such, it is not only the shield of the profession against interference from any party whatsoever in fulfilling the mission of the accountant, but in addition, it ensures compliance with business rules by its members. However, there is not a foreign firm ordinal international authority empowered to fulfill this crucial role.

The expertise of foreign firms auditing is of utmost importance and usefulness. However, launching an international tender for external audit of public banks, the government should have been more attentive to compliance with regulations because of administrative compliance with the law and delineation of responsibilities of each authority is inseparable from the rule of law and democracy.

It follows that the action taken by the Financial Secretary on the external audit of public banks is flawed competence, infringement of the law on the profession of Chartered Accountants and the provisions of the CSC management bodies SA. She falls, consequently, within the scope of Articles 5 and 7 of the Law on Administrative Court defining the abuse of power and, as such, it may be subject to annulment and suspension of performance on the basis of Articles 37 (new) and following of the Act.

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