Compliance Audit of Guaranteed Minimum Service Fees and Financial Reporting Transparency of Commercial Banks in Cameroon
Downloads
Despite the enactment of the Banking Commission for Central Africa's regulation No.R-2016/01, of April 4, 2016, and its reinforcement through regulations No. 01/20/CEMAC/UMAC/COBAC and Regulation No. R-2020/04 of October 8, 2020, transparency in banking service charges remains a persistent challenge in Cameroon's commercial banking industry. Many bank staff and customers lack knowledge of which services are guaranteed free and which attract fees, leading to frequent misclassification of charges, weakened financial reporting and damaged public trust. This study empirically examined the inter-connection between intensity of compliance audit of guarantee minimum banking services (GBMS) as stipulated by COBAC regulation, and financial reporting transparency of Commercial banks in Cameroon. using a quantitative ex-post facto research design, panel data from ten purposively selected commercial banks between 2015 and 2024 were analyzed using Ordinary Least Square regression model. Empirical results indicate that robust compliance audit of GMBS proxied by salary domiciliation charges (B= 0.42, p< 0.001), monthly account statement charges (B=0.31, P<0.005), cheque payment and internal transfer charges (B=0.18, p<0.012), significantly enhance financial reporting transparency, the intensification of compliance audit through detailed, reasonable, descent and transparent reporting in salary domiciliation, monthly account statement, cheque payment and internal transfer charges amongst others, narrows the knowledge gap, mount pressure on regulators, instruments of corporate governance and helps banks apply regulations more effectively and report accurately. The model explains 78% of the variation in financial reporting transparency, with no signs of multicollinearity (VIF <5), or autocorrelation (Durbin Watson =1.94). These findings grounded in financial intermediation and stakeholder theories, highlight the urgent need for better governance through robust compliance audit and clearer regulatory understanding. To build client trust and improve accountability, the study recommends strengthening staff training on COBAC provision for bank personnel, stricter COBAC oversight, improved audit systems, and mandatory itemized service charge disclosures and enhances consumer knowledge. Without these reforms, misclassification and confusion around banking fees will continue to undermine transparency and confidence in Cameroon financial institutions. The study offers critical insights for policymakers, professional accountants, and financial institutions seeking to reinforce governance, enforce service classification standards, and restore public confidence in the Cameroon banking industry.
Downloads
1. Abdul, A. (2017). Capital adequacy and profitability of Nigerian banks. Journal of Banking and Finance, 12(3), 45–59.
2. Abdulhameed, G. (2021). Impact of salary domiciliation on the profitability: An applied study in a sample of Iraqi banks.
3. Ajayi,T., Okonkwo, C., & Bello, M. (2019). Supervisory review and market discipline in Nigerian banking. African Journal of Finance, 8(2), 101–118.
Allen, F., Carletti, E., & Marquez, R. (2023). Transparency and trust in financial intermediation. Journal of Financial Economics, 147(1), 1–20. https://doi.org/10.1016/j.jfineco.2022.10.004
4. Anton, C., Camerero, C., & Carrero, M. (2007). The mediating effect of satisfaction in the relationship between service quality and customer loyalty in banking. Journal of Financial Services Marketing, 12(2), 115–129.
5. Aurier, P., & Mejia, L. (2017). Customer dissatisfaction and switching behavior in retail banking. International Journal of Consumer Studies, 41(5), 567–579. Banque de France. (2021). Banking services fees and vulnerable customers: Evaluation of the specific offer. https://www.banque-france.fr
6. Basel Committee on Banking Supervision. (2015). Corporate governance principles for banks. Bank for International Settlements.
7. Basel Committee on Banking Supervision. (2022). Principles for the effective management andsupervision of climate-related financial risks. Bank for International Settlements
8. Brown, C. (2024). Auditing for compliance: Navigating regulatory challenges. Academy of Accounting and Financial Studies Journal, 28(4), 1–3. https://www.abacademies.org/articles/auditing-for-compliance-navigating-regulatory- challenges-16940.html
9. Burnett, J. (2008). Pricing fairness and consumer perceptions in financial services. Journal of Consumer Affairs, 42(1), 56–78.
10. Ceesay, M. (2017). Pricing fairness and consumer switching in West African banks. Journal of African Business, 18(4), 321–339.
11. Chepkemoi, A. (2019). Influence of cheque truncation system project on financial performance of commercial banks listed in the Nairobi Stock Exchange. University of Nairobi.
12. Chukwuemeka, E., & Godswill, A. (2017). Financial literacy and banking behavior in Nigeria. International Journal of Finance and Banking Studies, 6(1), 22–35.
13. COBAC. (2016). Regulation No. R-2016/01 on guaranteed minimum banking services. Commission Bancaire de l’Afrique Centrale.
14. COBAC. (2020). Regulation No. R-2020/04 on the scope of guaranteed minimum banking services. Commission Bancaire de l’Afrique Centrale.
15. DeFond, M., & Zhang, J. (2014). A review of archival auditing research. Journal of Accounting and Economics, 58(2–3), 275–326.
16. Demirgüç-Kunt, A., Klapper, L., Singer, D., Ansar, S., & Hess, J. (2022). The Global Findex Database 2021: Financial inclusion, digital payments, and resilience in the face of crisis.WorldBank.
17. Diamond, D. W. (1984). Financial intermediation and delegated monitoring. The Review of Economic Studies, 51(3), 393–414.
18. Directorate General of the Treasury, Financial and Monetary Cooperation. (2025). Licensed banks in Cameroon. Republic of Cameroon, Ministry of Finance. https://dgtcfm.cm/en/licensed-banks-in-cameroon
19. Enguene, R. (2024). Capital requirements and financial stability in CEMAC: A PVAR approach. Central African Journal of Banking and Finance, 11(1), 33–52.
European Banking Authority. (2022). Thematic review on fee transparency in EU member states. https://www.eba.europa.eu
20. Ferrer, C., & Pereda, M. (2022). Bank service fees and financial transparency in Spain. Journal of European Banking Law, 14(3), 101–118.
21. Ferrer, J., & Pereda, M. (2022). Fee-based banking and consumer trust in Spain. Spanish Journal of Finance, 29(1), 77–94.
22. Fossung, M. F., & Verges, D. K. V. (2022). External audit quality and value creation: What relationship in the Cameroonian context. Open Journal of Accounting, 11, 21–41. https://doi.org/10.4236/ojacct.2022.112002
23. Freeman, R. E. (1984). Strategic management: A stakeholder approach. Pitman Publishing.
Gomstyn, A., & Jonker, A. (2025, June 27). What is a compliance audit? IBM Think. https://www.ibm.com/think/topics/compliance-audit
24. Harrison, J. S., Bosse, D. A., & Phillips, R. A. (2019). Managing for stakeholders, stakeholder utility functions, and competitive advantage. Strategic Management Journal, 40(4), 555–574.
25. Hong, N. T. P. (2024). Factors affecting the financial reporting quality in commercial banks: Evidence in Vietnam. International Journal of Applied Economics, Finance and Accounting, 19(2), 271–283.
26. Ibanichuka, E. A. L., & Briggs, E. (2018). Audit reports and value relevance of accounting information: Evidence from commercial banks in Nigeria. Indian Journal of Finance And Banking, 2(1), 1–15.
27. Ikeji, C., Okoro, J., & Nwankwo, L. (2024). Effect of audit quality on financial performance of deposit money banks. International Journal of Social Sciences and Management Research, 10(5), 107–117.
28. Imafidon, E. E., Josiah, M., & Agbo, I. S. (2023). Audit independence and financial statements quality in Nigeria listed banks. American Journal of Industrial and Business Management, 13, 973–984. https://doi.org/10.4236/ajibm.2023.139054
29. Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305–360.
30. Kara, A., & Mbilinyi, D. (2020). Service charges and switching behavior in Tanzanian banks. East African Journal of Business and Economics, 5(2), 88–104.
31. Keaveney, S. M. (1995). Customer switching behavior in service industries: An exploratory study. Journal of Marketing, 59(2), 71–82.
32. Keller, K. L. (2000). Building and managing corporate brand equity. Handbook of Marketing, 1(1),68–72.
33. Knechel, W. R., Van Staden, M., & Sun, Y. (2013). Audit quality and internal control effectiveness. Auditing: A Journal of Practice & Theory, 32(1), 203–231.
34. Kouam, J. (2024). Regulatory awareness and compliance in Cameroonian microfinance. Central African Journal of Banking, 10(1), 22–39.
35. Kouassi, K., & Tchétché, A. (2022). Banking service pricing and financial inclusion in WAEMU. West African Journal of Finance and Development, 7(4), 88–104.
36. Misbah, M. (2014). Financial literacy and switching behavior in Pakistani banks. Asian Journal of Finance & Accounting, 6(2), 45–60.
37. Monroe, K. B. (2012). Pricing: Making profitable decisions (3rd ed.). McGraw-Hill.
Nguyen, T. H. (2020). Basel III implementation and bank profitability in Vietnam. Southeast Asian Journal of Banking and Finance, 12(1), 33–49.
38. Nurunnabi, M. (2021). Disclosure, transparency, and international financial reporting standards. In International Financial Reporting Standards Implementation: A Global Experience (Chapter 5). Emerald Publishing.
39. Nyarko, S. (2015). Transaction costs and customer switching in Ghanaian banks. Journal of African Finance, 7(1), 55–70.
40. Obadire, A., & Obadire, T. (2023). Basel III regulations and bank performance in Africa: A cross-country analysis. African Journal of Financial Studies, 9(3), 77–95.
41. Obloj, T., & Zenger, T. (2023). Research: The complicated effects of pay transparency. Harvard Business Review.
42. Odetuyi, S., Afolabi, M., & Ojo, K. (2024). Evaluation of audit report quality determinants and financial reporting in listed deposit money banks in Nigeria. International Journal of Advanced Multidisciplinary Research Studies, 4(5), 208–220. https://www.multiresearchjournal.com/admin/uploads/archives/archive-1726475390.pdf
43. Ogbeifun, I. E., & Adeniran, T. E. (2020). Audit quality attributes and financial reporting quality: A case study of selected listed commercial banks in Nigeria. International Journal of Current Research, 12(5), 11460–11467.
44. Okezie, B., & Egeolu, C. (2023). Audit independence and reliability of financial reports: Empirical evidence from Nigerian banks. International Journal of Economics and Business Management, 5(3), 1–12.
https://www.iiardjournals.org/get/IJEBM/VOL.%205%20NO.%203%202019/IJEBM%201.pdf
45. PwC India. (2022). Digital payments and fee sustainability in India. https://www.pwc.in
Sahi, A., Al-Khafaji, H., & Jasim, R. (2022). Financial reporting quality of financial institutions: Literature review. Accounting, Corporate Governance & Business Review, 10(4), 55– 70. https://www.tandfonline.com/doi/pdf/10.1080/23311975.2022.2135210
46. Sharmin, S. (2017). Fairness and value perception in banking fees. Journal of Consumer Research, 44(2), 210–225.
Copyright (c) 2025 Ndipeta Takobesong EgbeAya Lot, Visemih William Mufee, Valentine Ojong Oben, Agbor Louis Tabot Ntong
This work is licensed under a Creative Commons Attribution 4.0 International License.
