| The French
accounting and auditing environment is divided into two separate professions,
both of which are government regulated. French law restricts a statutory
auditor and a public accountant from working for the same client. The
auditing profession is regulated by the Institute of Statutory Auditors
(La Compagnie Nationale des Commissaires aux Comptes - CNCC), and the
accounting profession by the Order of Chartered Accountants (l'Ordre des
Experts-Comptables - OEC). The auditors are supervised by the Ministry
of Justice (Garde des Sceaux) and accountants come under the supervision
of the Ministry of Economy and Finance.
Although the Commissariat aux Comptes has existed as an institution
since 1863, rapid economic expansion in the post-war period and the
concomitant growth of the financial markets in France, established the
obligation to inspect accounts, enforced under the Companies Act of
24 July 1966. A subsequent decree of 12 August 1969 created the Compagnie
Nationale des Commissaires aux Comptes under the aegis of the Ministry
of Justice.
All statutory auditors must be inscribed on the official list of the
CNCC, although the majority of them are also members of the OEC. The
CNCC is organised on a regional basis and members can be registered
in any one of the 34 offices throughout France.
The CNCC has seen its role greatly enlarged over the years to cover
inspection of accounts in all categories of organisations, both profit-
and non-profit-generating concerns. Beyond the statutory mission of
attesting that the financial statements are a true and fair presentation,
the French auditor is also called upon to intervene when companies seek
additional capital or to trigger an early warning procedure for companies
likely to encounter financial difficulties.
The OEC is divided into eight sectors of professional interest under
the aegis of a National Council made up of 66 members, 22 members of
which represent the regional councils. The body has been mandated to
represent the French accounting profession in its dealings with the
other international accounting bodies, in particular the IASC (International
Accounting Standards Committee).
The two bodies in France co-operate on issues of common professional
interest, such as adopting a joint approach to the organisation and
monitoring of peer reviews, and co-participate in a number of working
parties. Both bodies are members of the Fédération des Experts-Comptables
Européens (FEE).
The CNCC and the OEC formulate and enforce ethical standards, issue
technical standards and recommendations in their respective fields,
and oversee the peer reviews to ensure compliance with these standards.
They also issue accounting and reporting recommendations, which they
encourage their members to apply, and which have contributed to the
updating and modification of existing regulations.
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