Mauritius: Workshop on Relevance of Audit Committees in State-Owned Enterprises

The relevance of Audit Committee in State Owned Enterprises (SOE) was the focus of a half-day workshop which was held today at the Cyber Tower 1 in Ebène. Organised by the Office of Public Sector Governance (OPSG), under the aegis of the Prime Minister’s Office, the workshop is being attended by around 150 Chairpersons, Chief Executive Officers, Board members and Chairpersons of Audit committees and Internal auditors from around 30 SOE.

The objectives of this 5th workshop on Corporate Governance are to encourage SOE to establish an Audit committee; sensitize Board members of the modus operandi (composition, functioning, role and importance, benefits) of Audit committees; highlight the role of Board members regarding public accountability, governance and judicious use of resources; and promote compliance with the National Code of Corporate Governance.

The themes discussed relate to the role and benefits of setting up an effective Audit committee and the importance of internal controls in the improvement of SOE governance. The workshop was conducted by  Mr Afsar Ebrahim, Deputy Group Managing Partner, International Special Advisory Services Division, BDO & Co; and Mr Marcel Descroizilles, chairman, Risk Management and Audit Committee and Board Member, Rogers & Co. Ltd. Other speakers include Mr Gary Fine, Senior Private Sector Development Specialist at the World Bank; Dr Rajun Jugurnath, director of Audit; and Mr G. Gopee, director of the OPSG.

In his keynote address, Dr Jugurnath said that the forum is of particular relevance and timeliness because of the present economic crisis. Focus is now more on growth, cost effectiveness, financial reporting and compliance and hence the need for a good governance culture and audit committees in statutory bodies, he said.

According to him, an Audit committee is like a good insurance policy. ‘It’s better to have it and not need it than need it and not have it’, he said adding that, in recent years, the Audit committee has been increasingly gaining importance in the corporate governance systems in companies.

The Audit committee is created with the aim of enhancing confidence in the integrity of an organisation's processes and procedures relating to internal control and corporate reporting. Boards rely on Audit committees to, among other things, review financial reporting and appoint and provide oversight of the work of the external auditor. Audit committees also play a key role in providing oversight of risk management.

The Director of Audit recalled that Audit committees are an integral element of public accountability and governance and that the establishment of Audit committees in the public sector is a step in the right direction due to increased public scrutiny in the public sector.

For his part, director of the OPSG, Mr G. Gopee, stated that the series of workshops on Corporate Governance organised by the OPSG is a tangible manifestation of the increasing importance that the Prime Minister’s Office places on the need to support and improve Corporate Governance practices in the public sector.

He recalled that two surveys have been carried out by the OPSG to evaluate the present state of Corporate Governance in 32 public sector organisations. The study reveals that with regard to Audit committees, 75% of SOE are not abiding to the code of Corporate Governance on Board Committees as they do not have Audit committees. In the wake of the recent initiatives of the OPSG, eight new Audit committees have been set up and 15 are in the process of creation, of which five have taken the commitment to do so by end of September this year.