France

Member Organizations

Member Organization Associate

  Compagnie Nationale des Commissaires aux Comptes
  Conseil Supérieur de l'Ordre des Experts-Comptables

Legal and Regulatory Environment

  • Overview of Statutory Framework for Accounting and Auditing

    As a member of the European Union (EU), France is subject to the accounting, auditing and financial reporting requirements established in EU Regulations and Directives as transposed into national laws and regulations.

    The Commercial Code of 1966 (as amended) sets basic accounting functions for all business entities and requires companies to maintain accounting books and prepare annual financial statements. French accounting standards are developed and adopted by the Accounting Standards Authority (ANC), created by the Ordinance No. 2009-79 and Decree No. 2010-56, which is the legal body responsible for accounting standard-setting.

    In accordance with the EU statutory framework, Regulation EC 1606/2002, as transposed into national legislation by the ANC, listed entities are required to apply EU-endorsed IFRS Standards 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 and instead must 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 auditing requirements in France are transposed by the Audit Directive and Regulation (EU) No 537/2014. Auditing standards 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. The H3C will subsequently adopt the drafts as standards of professional practice, after receiving an opinion on the standards from the CNCC. The Ministry of Justice is ultimately responsible for endorsing the standards at the end of this process. The standards are based on the ISA.

    A mandatory audit with a term of six years is required for all PIEs and public limited companies which exceed two of the three following thresholds: (a) EUR 4,000,000 of total assets; (b) EUR 8,000,000 of turnover or resources; and/or (c) 50 employees. In addition, a mandatory audit is required for companies which are part of a small group when they exceed two of the three following three criteria: (a) EUR 2,000,000 of total assets; (b) EUR 4,000,000 of turnover or resources; (c) 25 employees.

    In 2019, the law Pacte introduced a voluntary statutory audit with a term of three years for Small and Medium Entities (SMEs).

    The profession of chartered accountant is regulated by the 1945 Ordinance, which specifies in particular that chartered accountants usually audit and assess the accounts of companies and organisations to which they are not bound by an employment contract. They are also authorised to certify the regularity and fairness of balance sheets and income statements. The profession is under the supervision of the Ministry of Economy and Finance and a government commissioner sits on all decision-making bodies of the Conseil National de l’Ordre des Experts-Comptables (CNOEC).

    The professional standards applicable to chartered accountants are prepared and drafted by the CNOEC and are transmitted to the Ministry of Economy and Finance, which is ultimately responsible for approving the standards at the end of this process. The standards are based on the ISAs.

  • Regulation of Accountancy Profession

    The Ordre des experts-comptables (OEC) is a national institution, created by the 1945 Ordinance and placed under the auspices of the Ministry of Economy and Finance. Its role is to represent, promote, defend and develop the profession of chartered accountant, both in France and abroad.

    The OEC also ensures compliance with professional ethics, defines standards and publishes recommendations that accountants must apply in the exercise of their functions. It participates in the development and dissemination of national and international accounting doctrine. This vocation is expressed through a constant commitment to the future of the profession: from training young people to mastering major developments. Everywhere, the OEC responds to progress and dynamics of the future.

    In France, the accounting diplomas (DCG, bachelor's degree, and DSCG, master’s degree) are national degrees designed and supervised by the Ministry of Higher Education. Students in the field follow the accounting curriculum provided by universities and some state-controlled private institutions. The curricula and teaching methods are developed in consultation with the CNOEC. Once they have obtained their master's degree, students must complete three years of professional practice in a public accounting/auditing firm and then obtain the final Diplôme d'Expertise Comptable (DEC), which allows access to the profession of public accountant as well as to that of auditor under certain conditions. Once they have graduated and are registered with the Order, professionals are required to complete 120 hours of continuing professional development (CPD) per three-year period.

    The DCG and DSCG programs have been thoroughly overhauled and modernized in 2019 (Decree of 13 February 2019). This reform concerns the program of some teaching units and does not modify the general architecture of the two diplomas in terms of overall timetable, nor their characteristics which make them specific. The change concerns the content, which is now broken down into skills and associated knowledge, to better correspond to the needs of the job market. The digital aspect has also been reinforced.

    The reform was carried out by the Ministry of Higher Education, in consultation with academics and the CNOEC, and in accordance with the IFAC Education Standards, the Directive 2014/56/EU on statutory audits of annual accounts and consolidated accounts and the Professional Accountancy Education Europe (formerly Common Content Project) framework, which aims to harmonize accounting curricula between European Member States.

    To be eligible to practise as an accountant, individuals must:

    - hold an university degree at master's level,

    - have acquired at least three years' professional experience in an accountancy firm as a trainee accountant,

    - pass the final examination for the DEC. The DEC also gives access to the profession of auditor if candidates have acquired significant practical experience in auditing during the three years of statutory training. There is another pathway to becoming an auditor, the Certificat d'aptitude aux fonctions de commissaire aux comptes (CAFCAC), which allows anyone with a master's degree to pass a preparatory certificate before starting a three-year practical training course, in the form of a statutory internship.

    - be registered with the OEC and the Compagnie des Commissaires aux Comptes (CNCC) if applicable.

    In France, chartered accountants are regulated by Ordinance No. 45-2138 of 1945, which created the CNOEC, as an independent organization, under the auspices of the Ministry of Economy and Finance. Individuals and legal entities are required to be members of the CNOEC to offer accountancy services other than statutory audit. In accordance with the law, the CNOEC responsibilities include the following: (i) maintaining the registry of chartered accountants and accounting firms; (ii) establishing CPD and professional conduct requirements; (iii) establishing and operating a quality control system; (iv) preparing and drafting professional conduct standards; (v) drafting auditing standards for contractual audits and reviews of historical financial information, and other assurance and related services engagements; (vi) providing input into the accountancy curricula and Initial Professional Development (IPD) requirements for chartered accountants; and (vii) representing, promoting, defending, and developing the profession of chartered accountant, both in France and abroad.

    In addition, the Ordinance No. 45-2138 of 1945, supplemented by the Decree No 2012-432 of 30 March 2012 and the Order of 19 January 2022 approving the internal rules of procedure of the OEC, authorises the Regional Disciplinary Chambers, which are legally independent from the CNOEC, to investigate and discipline chartered accountants. The Regional Disciplinary Chambers are fully integrated into the French judicial system. The Regional Disciplinary Chambers undertake discipline and investigation for CNOEC members. CNOEC members may appeal decisions before the National Disciplinary Chamber. The appeal to the decisions of the National Disciplinary chamber takes place before the Supreme Court (Conseil d’Etat).

    In France, the universities, the Ministries of Higher Education, Justice and Economy and Finance have a role in implementing IPD requirements for professional accountants, which are established in the Commercial Code for the “Commissaires aux comptes” and in the Decree 2012-432 of 2012 for the “Experts-comptables”. To be eligible to practice as a statutory auditor or chartered accountant, individuals must: have a university degree, have work experience of at least three years in an accounting/auditing firm, pass a final assessment, and obtain the French higher accountancy degree: “Diplôme d’Expertise Comptable” (DEC). The DEC gives access to both professions; however, auditors must obtain their practical experience in audit. 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” (CAFCAC) which permits someone without a specific university education in accounting—candidates are usually engineers—the opportunity to pass a preparatory certificate before beginning three years of practical training. Subsequently, candidates must be registered with the CNCC or CNOEC in order to practice.

  • Audit Oversight Arrangements

    The Financial Security Law, written into the Commercial Code, recognizes the High Council for Statutory Audits (H3C), under the supervision of the Ministry of Justice, as an independent, non-governmental entity responsible for the oversight of the audit profession. The H3C is a member of the International Forum of Independent Audit Regulators.

    The H3C has the following responsibilities: (i) the approval and registration of statutory auditors and audit firms; (ii) the adoption of standards on audit, professional ethics, and internal control, as well as professional best practices; (iii) establishing a quality assurance (QA) system; (iv) developing an investigative and disciplinary system; and (v) supervision of CPD of statutory auditors. As part of its mandate, the H3C has delegated some activities to the Compagnie nationale des commissaires aux comptes (CNCC)—the professional accountancy organization for statutory auditors in France. These include: (i) registration of statutory auditors and audit firms, except for non-EU statutory auditors and audit firms; (ii) QA inspections of non-public interest entities (non-PIEs); and (iii) monitoring of CPD for statutory auditors.

  • Professional Accountancy Organizations

    The Conseil National de l’Ordre des Experts-Comptables (CNOEC)

    The CNOEC is an independent organization, under the auspices of the Ministry of Economy and Finance, created by Ordinance No. 45-2138 of 1945. Individuals and legal entities are required to be members of CNOEC in order to offer accountancy services other than auditing. In accordance with the law, the CNOEC responsibilities include the following: (i) maintaining the registry of chartered accountants and accounting firms; (ii) establishing CPD and professional conduct requirements; (iii) establishing and operating a quality control system; (iv) preparing and drafting professional conduct standards; (v) drafting auditing standards for contractual audits and reviews of historical financial information, and other assurance and related services engagements; (vi) providing input into the accountancy curricula and IPD requirements for chartered accountants; and (vii) representing, promoting, defending, and developing the profession of chartered accountant, both in France and abroad.

    In addition to being an IFAC Member, CNOEC is also a member of Accountancy Europe, FIDEF, and FCM. In addition, CNOEC participates in the Professional Accountancy Education Europe (PAEE), formerly “Common Content Project”.

    The Compagnie Nationale des Commissaires aux Comptes (CNCC)

    The CNCC, created by the decree of August 12, 1969 (as amended May 27, 2005) and codified in the Commercial Code in August 2007, is an independent institute under the auspices and supervision of the Ministry of Justice. Statutory auditors who are authorized to practice in France, whether they are individuals or legal entities, are required to belong to the CNCC. The CNCC, along with its 33 regional arms—Compagnies régionales des commissaires aux comptes—carries out the following regulatory activities: (i) maintaining the registry of statutory auditors and audit firms, except for non-EU statutory auditors and audit firms; (ii) preparing and drafting professional standards for auditing; (iii) establishing and operating a QA systems; (iv) administering and monitoring of the CPD program; (v) providing input into the accountancy curricula and IPD requirements for statutory auditors; (vi) giving its opinion when required by the Ministry of Justice on draft laws and decrees; and (vii) submitting to the public authorities all useful proposals relating to the professional organization and the audit assignment.

    In addition to being an IFAC Member, CNCC is also a member of Accountancy Europe, the Federation Internationale des Experts-Comptables Francophone (FIDEF), and the Fédération des Experts-Comptables Mediterranéens (FCM). In addition, CNCC participates in the European “Common Content Project.”

Adoption of International Standards

  • Quality Assurance

    In France, in compliance with the Audit Directive and Regulation (EU) No 537/2014, a mandatory quality assurance (QA) review system is required for all statutory audits. The High Council for Statutory Audits (H3C) has the ultimate responsibility for quality assurance of all statutory audit firms.

    Accordingly, the H3C conducts QA reviews for all public interest entities (PIEs). PIEs include listed entities, credit institutions, insurance companies, and certain companies whose turnover exceeds a certain threshold, such as: financial holding companies, one of whose subsidiaries is a credit institution; mixed financial holding companies, one of whose subsidiaries is a PIE; insurance group companies, mutual insurance group companies, mutual grouping unions, insurance welfare groups, social protection insurance group companies. As far as non-PIEs QA reviews are concerned, the H3C has delegated the reviews to the Compagnie Nationale des Commissaires aux Comptes (CNCC). In fulfilling this responsibility, CNCC maintains a monitored peer review mechanism under the oversight of the H3C. In France, the five largest audit firms operating in the jurisdictions are inspected on an annual basis. Other PIE audit firms are inspected every three years (or six years for smaller firms), and non-PIEs audit firms are inspected every six years.

    To enhance the oversight of the securities market, the Autorité des Marchés Financiers (AMF) assists H3C in performing periodic inspections of statutory auditors appointed to companies under AMF’s supervision.

    In accordance with the Ordinance No. 45-2138 of 1945, supplemented by the Decree No 2012-432 of 30 March 2012 and the Order of 19 January 2022 approving the internal rules of procedure of the OEC, the CNOEC has put in place quality control mechanisms for the structures and engagements of its members.

    The CNOEC has transposed ISQC1 into its professional standards (ministerial decree) and is working on the transposition of the ISQM1 and ISQM2 before the end of 2022 for application from 2023 as provided for in the international standards.

    The quality control system put in place by the CNOEC is aligned with the obligations of SMO 1.

    Current Status: Adopted

  • International Education Standards

    In France, the universities, the Ministries of Higher Education, Justice, and Economy and Finance, have a role in implementing IPD requirements for professional accountants, which are established in the Commercial Code for the “Commissaires aux comptes” and in the Decree 2012-432 of 2012 for the “Experts-comptables”.

    To be eligible to practice as a chartered accountant, individuals must:

    • have an university degree at master level,
    • have work experience of at least three years in an accounting/auditing firm, as a trainee accountant,
    • pass the final examination for the DEC. The DEC also gives access to the profession of auditor if candidates have acquired significant practical experience in auditing during the three years of statutory training. There is another pathway to becoming an auditor, the Certificat d'aptitude aux fonctions de commissaire aux comptes (CAFCAC), which allows anyone with a master's degree to pass a preparatory certificate before starting a three-year practical training course in the form of a statutory internship.
    • be registered with the OEC and the CNCC if applicable.

    Current Status: Adopted

  • International Standards on Auditing

    In accordance with the Ordinance No. 45-2138 of 1945, the CNOEC is responsible for drawing up professional rules, which are subject to approval by the Ministry of Economy and Finance, and to organise the monitoring of their application.

    The standard-setting framework draws on international standard-setting provisions issued by the IAASB.

    The OEC standard framework consists of standards for audits and reviews of historical financial information, as well as for other assurance and related services engagements.

    The auditing standards relate to contractual auditing.

    The contractual audit is part of the prerogative of practice of chartered accountants in accordance with the provisions of Article 2 of the aforementioned Ordinance stating that the chartered accountant is also entitled to certify the regularity and sincerity of balance sheets and profit and loss accounts.

    The CNOEC indicates that the standards for contractual audits are:

    - the translated ISAs applicable since July 2019,

    - the standard for auditing financial statements in a SME applicable since July 2017.

    Current Status: Adopted

  • Code of Ethics for Professional Accountants

    The CNOEC is responsible for drafting ethical requirements and the Ministry of Economy and Finance for their approval, in accordance with the Ordinance No. 45-2138 of 19 September 1945.

    The Code of Ethics for chartered accountants was approved and published in the Decree 2012-432 of 30 March 2012.

    Current Status: Partially Adopted

  • International Public Sector Accounting Standards

    The Public Sector Accounting Standards Council (Conseil de Normalisation des Comptes Publics, CNOCP), an advisory body under the authority of the Ministry of Public Accounts, is responsible for establishing public sector accounting and reporting standards in France. The CNOCP issues prior recommendations on the general accounting principles applicable to the public sector in France.

    IPSAS have not been adopted in France, the CNOCP having concluded that it would not adopt them, following an analysis developed in 2014 ; however, IPSAS are considered to be one of the references for setting standards. The standards are different for central government, local governments and social security bodies, but they are all accrual based standards.

    The CNOEC reports in its SMO action plan that it has assisted the CNOCP in the translation of the 2015 IPSAS Handbook.

    Current Status: Not Adopted

  • Investigation and Discipline

    The regional disciplinary chambers established by Ordinance No. 45-2138 of 19 September 1945 are fully integrated into the French judicial system and are composed of two elected accountants from the Conseil régional de l'Ordre des experts-comptables (CROEC - Regional Council of the Order of Chartered Accountants) and a magistrate from the judiciary. The Government Commissioner (or his representative) to the CROEC represents the supervision of the profession. He makes observations on each case and attends the hearings of the regional disciplinary chamber.

    An appeal against a decision by a regional disciplinary chamber is made to the National Disciplinary Chamber, which is composed of two elected accountants from the CNOEC and a magistrate from the judiciary. The Government Commissioner (or his representative) at the CNOEC represents the profession's supervisory authority. He makes observations on each case and attends the hearings of the national disciplinary chamber.

    Appeals against the decisions of the National Disciplinary Chamber are made to the Council of State.

    The exhaustive list of sanctions ranging from reprimand to striking off is provided for in Article 53 of Order No. 45-2138 of 19 September 1945.

    Sanctions relating to AML / CFT may be imposed on the Director / Partner of an accounting firm that is not a member of the OEC or on an individual who is an employee, agent or person acting on behalf of one of the legal entities or a chartered accountant acting in his or her individual capacity (Article 53 bis of Order 45-2138 of 19 September 1945).

    The decisions handed down by the regional and national disciplinary chambers are published, after anonymisation, on the CNOEC website.

    The CNOEC reports that the Regional Chambers of Discipline processes fulfill the best practices of SMO 6.

    Current Status: Partially Adopted

  • International Financial Reporting Standards

    French accounting standards are developed and adopted by the Accounting Standards Authority (ANC), created by Ordinance No. 2009-79 and Decree No. 2010-56.

    In accordance with the EU statutory framework, Regulation EC 1606/2002, as transposed into national legislation by the ANC, listed entities are required to apply EU-endorsed IFRS Standards for consolidated financial statements. In addition, all other companies are permitted to apply IFRS for their consolidated financial statements. However, entities are not permitted to apply IFRS for the preparation of their individual financial statements. These must be prepared in accordance with French accounting standards (French GAAP).

    The ANC has concluded that there is no demand for the IFRS for SMEs in France as French GAAP is considered fit for purpose.

    Current Status: Partially Adopted

Disclaimer

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.

 

Methodology

Methodology
Last updated: 10/2022
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