Auditor

Nomination

The titular CAC are distinguished, which exert indeed the control of the entity and the CAC temporary which replace the holder when this last ceases its functions in the course of mandate. Whatever the type of the entity, the statute and the missions of the CAC are identical.

A natural person or a partnership, registered on a special list drawn up in the spring of each Court of Appeal can be named CAC. The person must be member of an professional organization: the CRCC (regional company of the auditors). The law of August 1st, 2003 relating to financial safety creates the High council of the Audit Office (H3C), which has the role of ensuring the monitoring of the profession with the assistance of the National company of the auditors.

The H3C is charged:

to identify and promote the professional good practices,
to give an opinion on the professional standards,
to ensure like authority of call of the decisions of the CRCC.

The Auditors must respect a code of conduct.

The CAC are remunerated by the controlled entity. Remuneration is not freely fixed, but it is calculated according to a legal scale (law of July 3rd, 1985).

There exists a general incompatibility and specific incompatibilities. The CAC must preserve its independence. Article 73 of the law of August 1st, 2003 relating to financial safety prohibited for the same auditor to certify during more than six consecutive exercises the accounts of the moral persons calling public upon the saving

With the constitution, the CAC is elected by the constitutive assembly, when the company makes a public call to the saving, in the other cases, the CAC is indicated by the statutes. During the social life, the CAC is named by the AGO (standard general meeting) or court order, at the request of any shareholder, if the assembly omits to elect a police chief.

Term of the office

The CAC are named for one duration of six exercises. The functions of the temporary CAC have the same duration as that of the holder. The functions cease with the expiry of the duration, the CAC are re-eligible, that is to say by anticipation, for two causes:

by revocation for right reason, the AGO or in justice (non-fulfilment of the mission, disclosure of secrecy on the entity, interference in management, prevention by long illness…),
by resignation for right reason: disease, litigation engraves with the entity, after notification with the entity.

Missions

The main mission of the CAC is that to certify the regularity and the sincerity of the accounts. It is permanent, it comprises obligations towards the associates. N the other hand, certain prerogatives are granted to them. The mission of the CAC is exclusive of any interference in management: no praise, nor critical on the management of the entity.

Statutory audit

The joint stock companies, public limit companies, limited partnerships with share capitals and joint stock companies simplified, are subjected to the statutory audit, whatever their size (law of March 1st, 1984).

The partnerships, the limited liability companies, limited partnerships, as any moral person having an economic activity belong to control, since they exceed at least 2 of the following thresholds:

Total assessment > 1.550.000 €
CA Paid HT > 3.100.000 €
> 50

In the partnerships and limited partnerships not subjected to obligatory legal control, the associates can unanimously indicate a CAC or with a majority envisaged in the statutes. In the limited liability companies, the associates can name a CAC with AG, in the majority ordinary.

The CAC have the permanent role:

to check the books and values of the entity,
to control the regularity and the sincerity of the accounts,
to make sure of the sincerity of the information given in the annual report and the documents addressed to associated on the financial position and the accounts of the entity,
to check, in SA, that the equality of the associates was respected.

These various controls cannot relate to the appropriateness of the actions of management, nor to involve an interference of the CAC in management.

Certification

The L.823-9 article of the Commercial law lays out that " The auditors certify, by justifying their appreciations, that the annual accounts are regular and sincere and give an image faithful of the result of the operations of the past exercise as well as financial position and inheritance of the person or entity at the end of this exercice."

Regularity: conformity of the accounts with the rules of evaluation and presentation,
Sincerity: honesty and bona fide in the establishment of the accounts.

The same article imposes the certification of the group accounts. Certification has the aim of guaranteeing to the shareholders and to the thirds that professionals qualified, after being itself formed with the diligences fixed by the profession, acquired the conviction that the accounts are regular and sincere and give a faithful image of the results, financial position and inheritance of the entity.

There are three levels of results:

Certification without reserve: the annual accounts are established according to the rules in force and the accounting policies are applied. The objective of the faithful image is achieved.

Certification with reserves: the reserves express a limitation with the range of certification. They are explained by the fact why the concepts of regularity, sincerity and faithful image are relative.

Refusal To certify.

On the precise causes of these results: to see Certification

Information

The CAC must communicate the result of their investigations:

with the leader social: controls and checks proceeded, modifications suggested for the methods evaluation, discovered irregularities,
with the associated ones: with the AGO, the CAC draw up and present a general report/ratio reporting the achievement of the general missions, and a special relationship on conventions concluded between the company and its leaders, within the framework of the alarm procedure, on certain particular operations (fusions, reduction of the capital…).

Denunciation

The CAC must reveal with the Public prosecutor, the criminal acts made within the company and discovered during various investigations. With respect to the thirds, the CAC are held with the professional secrecy.

Prevention of the difficulties

The law of March 1st, 1984 and the decree of March 1st, 1985 relating to the prevention and the amicable settlement of the difficulties of the companies envisaged an increased intervention of the CAC in two fields: countable and financial information (for certain companies, report/ratio on the table of financing, the plan of financing and the estimated income statement) and alarm procedures (if the CAC detects facts likely to compromise the continuity of the exploitation).

Prerogatives

The prerogatives of the CAC are very broad, they are exerted by:

right to be informed:

put at their disposal, at least one month before the assembly, at the head office, of the annual accounts, the annual report, the group accounts and the report/ratio on the management of the group,
right to be convened and to take part in the meeting of all the assemblies of associates, CA or the directory which balances,

right of investigation:

the CAC can be made communicate, on the spot, constantly, all the social accounting, the documents of the parent companies or the subsidiary companies of the controlled companies, of the documents of the agents and auxiliaries of the controlled company,

the right to convene the assemblies of associated: in the absence of convocation by the qualified social bodies, the CAC can convene these assemblies.

Responsibilities

civil responsibility: (professional insurance) faults, negligences made in the exercise of the functions. The CAC are held with an obligation of means. The responsibility is not committed because of the revelations with the Prosecutor.
criminal responsibility: breach of professional secrecy, not revelation of the criminal acts, maintenance of the functions in spite of incompatibilities or prohibitions, untrue or incomplete report/ratio.
disciplinary Responsibility: pronounced in first authority by the Regional court of discipline of the CRCC and in second authority by the H3C.

Other:

Social responsibility of company (RSE): the auditors are signatories of certain reports/ratios of social responsibility (or of Sustainable development). RSE gives place to some obligation S legal.

See too

Internal bonds

To that the
To that the accountant and financial,
Certified public accountant.

External bonds

the National company of the Auditors
Chartered accountants and Auditors of France (ECF)
French Institute of the Certified public accountants and the Auditors (IFEC)

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