Conseil Supérieur de l'Ordre des Experts-Comptables
Member | Established: 1945 | Member
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 Compagnie Nationale des Commissaires aux Comptes (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.
While CSOEC has no direct responsibility for establishing a QA review system for statutory auditors, the CSOEC reports that it has developed and implemented a system of quality control for the work activities—i.e. contractual audits and other engagements—of its members since 2012. Accounting firms are reviewed approximately once every eight years. The CSOEC indicates it is planning to further improve its review system in accordance with the best practices of SMO 1 and aims to increase the frequency of the reviews. In addition, the CSOEC indicates in its SMO Action Plan that it has adopted the ISQC 1 with slight modifications given the nature of its members’ engagements.
To support its members with review process, the CSOEC indicates it has translated the ISQC 1 into French and incorporated into its Handbook of professional standards. The CSOEC indicates that it: (i) disseminates information on quality control standards through printed materials and its website; (ii) includes quality control standards in its continuing professional development; and (iii) liaises with regional bodies to ensure implementation of the standards.
The CSOEC is encouraged to conduct a comparison of its system requirements with those of the SMO 1, and share the results of the review. If gaps are identified, the CSOEC is encouraged to consider actions to further align its system with the SMO 1 requirements.
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 Compagnie Nationale des Commissaires aux Comptes (CNCC) and the 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.” Subsequently, candidates must be registered with the CNCC or CSOEC.
Once a member of the CSOEC, individuals are required to complete 120 hours of continuing professional development over a 3-year rolling period.
To support adoption and implementation of the IES requirements into national accountancy programming, the CSOEC, in collaboration with the CNCC, 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 CSOEC is encouraged to clarify the version of IES that is currently effective for chartered accountants and if it is an older version (pre-2015), the CSOEC 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 CSOEC 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 Compagnie Nationale des Commissaires aux Comptes (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.
In this context, the CSOEC assumes responsibility for adopting standards related to its members’ areas of work, which does not include statutory audits. CSOEC drafts auditing standards for contractual audits and reviews of historical financial information, and other assurance and related services engagements, and submits them to the Ministry of Economy, Finance and Budget for approval. The CSOEC reports that it has adopted a significant portion of the ISA pronouncements and that by July 2017, it planned to take into account the 2016 pronouncements.
To facilitate an ongoing adoption and implementation process, the CSOEC indicates that it: (i) monitors new and amended standards issued by the IAASB, (ii) regularly incorporates and updates the standards into its Handbook of professional standards; (iii) develops implementation guidelines of the standards for its members; (iv) disseminates information on updates to the standards and international developments in the area through printed materials and its website; and (v) providing professional development activities.
The CSOEC is encouraged to clarify if the Ministry of Economy, Finance and Budget approved the adoption of the 2016 IAASB pronouncements and requested to provide a clear statement in its SMO Action Plan on the extent on alignment of the standards on other assurance and related services with ISA in the jurisdiction. In addition, if deemed feasible, it may be beneficial for CSOEC to participate in the international standard-setting process by providing comments on exposure drafts and other IAASB pronouncements to share its experiences and perspective.
SMO 4: Code of Ethics for Professional Accountants
The CSOEC is responsible for drafting ethical requirements for its members, which are chartered accountants, and the Ministry of Economy, Finance and Budget then approves the requirements. The Code of Ethics for chartered accountants was approved and published in the Decree 2012-432 of 2012.
The CSOEC states that its ethical code cannot be directly compared to the IESBA Code as its Code does not include Part B of the IESBA Code and does not aggregate all the texts dealing with ethical issues that can be encountered by professional accountants. While its CSOEC does not adopt the IESBA Code, it supported the translation of the 2009 IESBA Code into French in collaboration with the Belgian Institut des Réviseurs d’ Entreprises, CPA Canada, and the Institute of Chartered Accountants of Cameroon.
The CSOEC is encourage 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 Economy, Finance and Budget. These are examples of best practices that can be shared and highlighted through the Action Plan.
The CSOEC is encouraged to demonstrate how it supports its members with the implementation of the national ethical requirements.
SMO 5: International Public Sector Accounting Standards
The CSOEC 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 CSOEC and the Compagnie Nationale des Commissaires aux Comptes (CNCC), IPSAS have not been adopted in France but they are considered as one of the references for establishing standards.
The CSOEC states it is proactive in this area and that it collaborates with the CNCC in 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 CSOEC is encouraged to clarify the latest version of IPSAS used by the Public Sector Accounting Standards Council as basis for preparation of the national public sector accounting standards. In addition, the CSOEC is encouraged to clarify the extent on alignment of the national public sector accounting standards with IPSAS.
SMO 6: Investigation and Discipline
In France, Regional Chambers of Discipline, which are legally independent from the CSOEC, are responsible for carrying investigative and disciplinary (I&D) procedures for chartered accountants. It is not clear to what extent the I&D systems comply with the best practices of SMO 6.
The CSOEC is requested to provide a clear statement on whether the I&D procedures for chartered accountants is aligned with the best practices of the SMO 6. It can facilitate this by completing the SMO 6 self-assessment checklist.
CSOEC 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 legal body 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 required to use 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 CSOEC reports that, in collaboration with the Compagnie Nationale des Commissaires aux Comptes (CNCC), 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 CSOEC 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.
Among its members, the CSOEC, in association with the CNCC, 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 CPD 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 CSOEC 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.
IFAC bears no responsibility for the information provided in the SMO Action Plans prepared by IFAC member organizations. Please see our full Disclaimer for additional information.