Legal Audit Control Cannot be Effective Without Regulation and Protection of the Profession
The president of the Tunisian Center for Corporate Governance (Ctge) affirms that "the time has come to rethink our financial security model in depth." This statement comes as the 2005-96 law on financial security is being re-examined, 20 years after its promulgation, amidst a surge in bankruptcy and fraud cases that have shaken the business world in Tunisia.
Background and Context
The law, which aims to strengthen financial transparency in companies, was enacted in 2005 in a specific national and international context. At the beginning of the 2000s, several countries around the world strengthened the transparency of financial reports through laws like Sox (in the United States) or similar texts in Europe. In Tunisia, a bankruptcy case involving an electrical goods sales company eroded confidence in financial markets, making the introduction of a law supporting the Commercial Companies Code inevitable.
Key Provisions of the Law
The 2005-96 law is based on seven pillars:
- The presence of auditors in all commercial companies
- The independence of auditors
- The transparency of commercial companies
- The responsibility of control and management bodies in commercial companies
- The financial disclosure policy of companies with good governance
- The legal institution of dual control
- The organization of portfolio management for securities on behalf of third parties
Assessment and Recommendations
The president of the Ctge, Fayçal Derbel, presented the results of two surveys conducted among samples of accounting experts and non-financial, non-listed companies. The surveys revealed a gap between the text and the context, with the legal framework proving ineffective without rigorous application and a culture of supervision. The results also highlighted the importance of the National Enterprise Register (RNE) as a guarantee of trust, with 81% of companies using it to communicate financial information and 89% to gather information on partners, clients, and suppliers.
Findings and Proposals
The surveys found that:
- 74.5% of accounting experts had refused audit missions due to independence concerns
- 78.4% had not undergone any periodic and independent control in the last three years
- 43% had expressed reservations in their reports in 10-30% of cases
- 36% had identified major weaknesses in internal control systems
- 41.2% had reported criminal offenses to the public prosecutor in the last three years
The accounting profession recommends:
- Suppressing the risk of penalization
- Blocking the registration of companies that have not appointed an auditor
- Establishing academic and professional conditions for the position of administrator
Conclusion
The president of the Ctge concludes that these figures reflect a deficit in the culture of compliance with laws. He emphasizes that corporate governance must evolve at the same pace as the technology economy and that legal audit control cannot be effective without regulation and protection of the profession. He calls for a rethink of the financial security model, transitioning from a formal compliance logic to a shared responsibility culture, from dispersed control to coordinated and institutionalized supervision, and from apparent governance to effective governance. He also advocates for the creation of an independent supervisory body, similar to the PCAOB.
