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Background on accountancy and auditing in France
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.