Compagnie Nationale des Commissaires aux Comptes
Member | Established: 1969 | Member since 1982
Statements of Membership Obligation (SMO)
The Statements of Membership Obligations form the basis of the IFAC Member Compliance Program. They serve as a framework for credible and high-quality professional accountancy organizations focused on serving the public interest by adopting, or otherwise incorporating, and supporting implementation of international standards and maintaining adequate enforcement mechanisms to ensure the professional behavior of their individual members.
- SMO 1: Quality Assurance
In France, the High Council for Statutory Audits (H3C), is responsible for the establishment and implementation of a quality assurance (QA) review system for all statutory audits of financial statements. The H3C has established a QA system for all public interest entities (PIEs) and has delegated the QA reviews for non-PIEs to the CNCC. It appears that the QA reviews for statutory auditors being carried out by the H3C and CNCC are largely aligned with the SMO 1, additional information is necessary to confirm alignment.
To fulfill its responsibility, the CNCC maintains a monitored peer review mechanism for audits of non-PIEs. The CNCC reports that its delivers continuing professional development programs to its members on subjects such as quality control standards and the inspection processes of the H3C and CNCC. In addition to its inspection activities, in cooperation with Accountancy Europe, the CNCC has ongoing mechanism in place to support the future endorsement by the European Commission and the France Ministry of Justice of the ISQC 1 and ISA 220.
The CNCC is encouraged to complete the self-assessment checklist of its QA review mechanism against SMO 1 requirements to affirm alignment.
- SMO 2: International Education Standards
Initial professional development requirements for professional accountants are established in the Commercial Code and are implemented by the French universities, the Ministries of Higher Education, Justice and Economy, Finance and Budget, the CNCC and the Conseil Supérieur de l’Ordre des Experts-Comptables (CSOEC).
To be eligible to practice as statutory auditors or chartered accountants, individuals must: have a university degree; three years’ work experience; pass a final assessment, and obtain the French higher accountancy degree: “Diplôme d’Expertise Comptable.” In addition, there is a second pathway to become a statutory auditor through the professional certificate “Certificat d’aptitude aux fonctions de commissaire aux comptes” which permits someone without university education in accounting the opportunity to pass a preparatory certificate before beginning three years of practical training. Subsequently, candidates must be registered with the CNCC or CSOEC.
Once a member of CCNC, individuals are required to complete 120 hours of continuing professional development (CPD) over a 3-year rolling period. For statutory auditors, the High Council for Statutory Audits (H3C) defines the general guidelines and the key areas for CPD obligation, and ensures compliance with these requirements. The H3C has delegated CPD monitoring responsibilities to the CNCC.
To support adoption and implementation of the IES requirements into national accountancy programming, the CNCC, in collaboration with the CSOEC, reports a number of advocacy activities with the regulators. For example, the institutes provided input into the accounting syllabus delivered by universities and influenced work experience requirements. Furthermore, as a fellow founder of the “EU Common Content Project,” which aims to harmonize the accountancy education programs participating in the project, the CNCC worked on the content of the education programs attached to each professional accounting degree.
The CNCC is encouraged to clarify the version of IES requirements that are currently implemented for statutory auditors and if it is an older version (pre-2015), the CNCC is encouraged to report on initiatives it might be undertaking to incorporate the revised IES requirements, which emphasize a learning-outcomes approach. In addition, the CNCC is encouraged to clarify if participates in providing comments to exposure drafts issued by the IAESB.
- SMO 3: International Standards on Auditing
Applicable auditing standards in France are prepared and drafted by a joint commission of the CNCC and the High Council for Statutory Audits (H3C), the audit oversight authority. After receiving an opinion on the standards from the CNCC, the H3C will subsequently adopt the standards as professional practice. The Ministry of Justice is the ultimate responsible for endorsing the standards at the end of the process. The standards are based on the ISA. The CNCC indicates that France is awaiting a clear signal from the European Commission on the ISA adoption in order to incorporate all requirements.
The CNCC has confirmed its support for the adoption of ISA at the EU level in the context of the Audit Reform and the Audit Green Paper. The CNCC indicates that it: (i) monitors new and amended standards issued by the IAASB, (ii) completes timely translations of the ISA, in collaboration of the Belgian Institut des Réviseurs d’Entreprises; and (iii) disseminates information on updates to the standards and international developments in the area through printed materials and its website.
At the international level, the CNCC contributes to the work of the ISA subgroup of the Committee of European Auditing Oversight Bodies and participates in the international standard-setting process by providing comments on exposure drafts and other IAASB pronouncements
The CNCC is encouraged to clarify the extent on alignment of the standards of professional practice with ISA in the jurisdiction.
- SMO 4: Code of Ethics for Professional Accountants
The Ministry of Justice (MoJ) adopts ethical requirements for statutory auditors and while its Code of Ethics is not based on the IESBA Code of Ethics, the CNCC indicates that its requirements are considered more stringent than the IESBA Code. The CNCC indicates that the MoJ is presently working on the publication of a revised Code of Ethics for statutory auditors. Upon completion of the revised Code of Ethics, the CNCC is planning to undertake a benchmarking exercise between the revised Code of Ethics and the IESBA Code to identify any areas of departure.
The CNCC reports that it has promoted the importance of adoption and implementation of the IESBA Code of Ethics for statutory auditors over several years, including the translation of the 2009 IESBA Code of Ethics. The CNCC indicates it monitors new and amended standards issued by the IESBA and participates in translations initiatives.
To support implementation of the national code for statutory auditors, the CNCC has mechanisms in place for disseminating information around ethical issues, providing training activities, and developing implementation guidelines for its members. Lastly, the CNCC indicates that it participates in the international standard-setting process by providing comments on exposure drafts and other IESBA pronouncements.
The CNCC is encouraged to provide an update on the Ministry of Justice’s efforts and actions to adopt a revised ethical code and its application within France. In addition, the CNCC is encouraged to provide information on planned actions or initiatives related to raising awareness on and supporting the adoption of the IESBA Code of Ethics: e.g. activities to disseminate information on the IESBA Code of Ethics, incorporating the IESBA Code of Ethics in training activities, activities to collaborate with the Ministry of Justice. These are examples of best practices that can be shared and highlighted through the Action Plan.
- SMO 5: International Public Sector Accounting Standards
The CNCC is not responsible for the adoption of public sector accounting standards, which are adopted by the Public Sector Accounting Standards Council (CNOCP)—an advisory body placed under the authority of the Ministry of Public Accounts. As reported by CNCC and the Conseil Supérieur de l’Ordre des Experts-Comptables (CSOEC), IPSAS have not been adopted in France but they are considered as one of the references for establishing standards.
The CNCC states it is proactive in this area and that it collaborates with the CSOEC on the following activities: (i) participation in the CNOCP’s working group to provide comments to the IPSASB’s exposure drafts and other pronouncements; (ii) advocate for IPSAS adoption through the professional accountants on the CNOCP’s Board; and (iii) development of specialized training in the public sector as part of the continuing professional development programs.
The CNCC is encouraged to clarify the latest version of IPSAS used by the Public Sector Accounting Standards Council as a basis for preparation of the national public sector accounting standards. In addition, the CNCC is encouraged to clarify the extent on alignment of the national public sector accounting standards with IPSAS.
- SMO 6: Investigation and Discipline
In France, the High Council for Statutory Audits (H3C) and the Regional Chambers of Discipline—which are legally independent from the CNCC and the Conseil Supérieur de l’Ordre des Experts-Comptables—are responsible for establishing investigative and disciplinary (I&D) systems for professional accountants. The H3C provides detailed information on sanctions issued within its annual report.
The CNCC reports that the I&D system for statutory auditors meets most of the SMO 6 requirements.
The CNCC is encouraged to provide a clear statement on whether the H3C’s I&D system is aligned with the best practices of the SMO 6. It can facilitate this by completing the SMO 6 self-assessment checklist. The CNCC could also complete the same SMO 6 self-assessment for the Regional Chambers of Discipline mechanisms and report if all Regional Chambers operate using the same procedures. If the comparison indicates areas of less than full compliance, the CNCC is encouraged to formulate actions steps to propose the elimination of gaps.
In addition, the CNCC is encouraged to consider elaborating the SMO 6 section in its Action Plan by providing information on its involvement in regards to the I&D systems: e.g. activities to disseminate information on the I&D systems to the public; implementation of training activities based on the outcomes and results of the I&D systems. These are examples of best practices that can be shared and highlighted through the Action Plan.
- SMO 7: International Financial Reporting Standards
French accounting standards are developed and adopted by the Accounting Standards Authority (ANC), which is the body legally responsible for accounting standard-setting. Given that the EU statutory framework has been transposed into national legislation by the ANC, listed entities are required to apply EU-endorsed IFRS for consolidated financial statements. In addition, all other companies are permitted to apply IFRS for their consolidated financial statements. However, no entity is allowed to apply IFRS for the preparation of their individual financial statements, which are to be prepared using French accounting standards (French GAAP). The ANC has concluded that there is no demand for the IFRS for SMEs in France where French GAAP is considered fit for purpose.
The CNCC reports that, in collaboration with the Conseil Supérieur de l’Ordre des Experts-Comptables (CSOEC), it has promoted the adoption of IFRS to the ANC by participating in different working groups set up by the national accounting standard-setter. In addition, while the CNCC is no longer a direct member of the ANC, professional members of both institutes are members of the ANC Board, its committees, and working groups which help support the ANC’s standard-setting work.
Amongst its members, the CNCC, in association with the CSOEC, supports IFRS implementation through the development of a website dedicated to IFRS; the issuance a French version of the Guide to IFRS for SMEs; provision of training activities, including biennial technical conferences on IFRS and comprehensive inclusion of IFRS related issues into continuing professional development courses; distribution of information on the standards through various dissemination means, such as its website, quarterly newsletter on IFRS application, professional magazine; and responding to technical questions from its members on IFRS.
The CNCC indicates that it aids the ANC and Accountancy Europe in developing responses to the public consultations issued by the IASB and/or the European Financial Advisory Group on IFRS and related matters.
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