Independence through Governance

Author: Zhirayr Mkhitaryan, Board Member of the Audit Chamber of Armenia, PhD in Economics 

Disclaimer. The views expressed in the article are those of the author and do not necessarily represent the views of the Audit Chamber of Armenia. 

Since its adoption in 2007, the Mexico Declaration on SAI Independence has been a landmark in strengthening the independence of Supreme Audit Institutions (SAIs) worldwide. By codifying eight principles, it established a global consensus: independence is essential for credible public audit.

Yet the Declaration’s principles are largely focused on the external and negative dimension of independence—what others (Parliament, Government) must do or refrain from doing. Legislatures should grant SAIs a broad mandate, financial and managerial autonomy, and unrestricted access to information. Governments should not unduly interfere in the prescribed areas. These safeguards remain indispensable, particularly in contexts where many SAIs around the world still face direct external pressure.

But this is only one side of the coin. The internal and positive dimension of independence—how SAIs are institutionally designed and governed—matters just as much. Independence is not only about external guarantees but also about internal resilience. Institutions that lack clear checks and balances may fail to act, or be seen to act, independently—even if external protections are in place.

A recent reform of the governance model of the Audit Chamber of Armenia illustrates how this dimension can be operationalized. Previously, its Board consisted of seven members—all executive directors, each coordinating different audit teams and projects. Today, the Board includes both executive and non-executive directors, with non-executives holding the majority in the boardroom. Four board committees now provide structured oversight:

• Executive Committee – comprising the Chairman and two board members. Each of the two members coordinates either the performance audit or the financial/compliance audit department.
• Quality Committee – composed of three non-executive directors, overseeing all stages of audit projects, from planning to reporting.
• Ethics Committee – composed of three non-executive directors, responsible for ethical oversight across the institution.
• Audit Committee – composed of three non-executive directors, overseeing the internal procedures of the SAI.

This system of intra-institutional checks and balances—both horizontal (between Board committees) and vertical (between the Board and management)—adds an additional layer of safeguards, strengthening the independence of the SAI.

Almost two decades after the Mexico Declaration, the time is ripe to ask: should we expand it with a “Ninth Principle”—one that secures the internal dimension of independence through governance?