Compagnie Nationale des Commissaires aux Comptes

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 best practices; however, ISQC 1 and ISA 220, which are key components of the SMO 1 best practices, are not adopted.

To fulfill its responsibility as delegated by the H3C, the CNCC maintains a monitored peer review mechanism for audits of non-PIEs. The CNCC reports that it 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, the CNCC has an ongoing mechanism in place to support the future endorsement and adoption of the ISQC 1 and ISA 220 by the European Commission and the French Ministry of Justice.

Current Status: Sustain

Initial professional development (IPD) requirements for professional accountants are established in the Commercial Code (“Commissaires aux comptes”) and in the Decree 2012-432 of 2012 (Experts-comptables), and are implemented by the French universities, the Ministries of Higher Education, Justice and Economy, Finance and Budget. The CNCC and the Conseil National de l’Ordre des Experts-Comptables (CNOEC) report that the education requirements in place for all professional accountants meet the revised 2019 IES requirements.

To be eligible to practice as a statutory auditor, 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” (DEC). 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 specific 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.

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 fulfillment 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 in national accountancy programming, the CNCC, in collaboration with the CNOEC, reports it advocates and liaises regularly with the regulators. For example, the institutes provide input into the accounting syllabi delivered by universities and influenced regulators in the establishment of work experience requirements. Furthermore, as a fellow founder of the “Professional Accountancy Education Europe (PAEE)”—which aims to harmonize the accountancy education programs of countries participating in the project—the CNCC worked on the content of the education programs to better harmonize with other countries.

Additionally, through the “EU Common Content Project,” the CNCC has participated in the international standard-setting process by providing comments on exposure drafts and other education pronouncements.

Current Status: Sustain

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 ultimately 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 ISA adoption to incorporate all standards and pronouncements.

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 Conseil National de l’Ordre des Experts-Comptables (CNOEC) and Belgian Institut des Réviseurs d’Entreprises (IRE); (iii) promotes within the commission that the standards should be based on the most up-to-date version of ISA; and (iv) disseminates information on updates to the standards and international developments in the area through printed materials and its website.To facilitate members’ ongoing implementation of the standards, the CNCC offers professional development activities and develops implementation guidelines.

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 and IRE have translated the 2018 IAASB Handbook. The 2020 IAASB Handbook is also available in French. CNCC is encouraged to clarify which of these versions of ISA is used as reference for the preparation of the national audit standards.

Current Status: Sustain

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, it complies with EU regulation and the CNCC notes that its requirements include a threats & safeguard framework and are considered not to be less stringent than those of the IESBA Code of Ethics.

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 and supported the translation of the 2009 IESBA Code of Ethics. The CNCC indicates it monitors new and amended standards issued by the IESBA.

To support the 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. CNCC reports that it raises awareness of the IESBA Code to relevant stakeholders such as the High Council for Statutory Audits (H3C - the audit oversight authority). For example, during the drafting of the ethical standard aimed at providing guidance on the fundamental principles of the French “Code de déontologie” (pending endorsement by the Ministry of Justice as of 2022), CNCC encouraged H3C to refer to the same principles in the IESBA Code to guide their interpretation of the French “Code de déontologie”. Furthermore, CNCC facilitated a meeting between the IESBA Chair and French member of IESBA with the President of H3C in October 2022 regarding the IESBA strategic and work plan which is expected to raise awareness of the importance of the IESBA Code.

Lastly, the CNCC indicates that it participates in the international standard-setting process by providing comments on exposure drafts and other IESBA pronouncements.

IFAC strongly encourages jurisdictions to adopt the IESBA's International Code of Ethics which provides fundamental principles and the high-quality, internationally appropriate ethics standards for professional accountants, including auditor independence requirements. The 2021 International Code of Ethics is the latest version of the Code issued by IESBA and contains revisions effective in 2021 and 2022.

Current Status: Review & Improve

The CNCC is not responsible for the adoption of public sector accounting standards, which are determined by the Public Sector Accounting Standards Council (CNOCP)—an advisory body under the authority of the Ministry of Public Accounts. As reported by CNCC, IPSAS have not been adopted in France, but they are considered as one of the references for establishing standards.

The CNCC states it collaborates with the CNOEC 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 representation on the CNOCP’s Board; (iii) development of specialized training in the public sector as part of the CPD programs; and (iv) assisted the CNOCP in the translation of the 2018 IPSAS Handbook.

Current Status: Sustain

In France, the Commercial Code establishes a mandatory investigative and disciplinary (I&D) system for statutory auditors. With the implementation of the EU Audit Directive 2014/56 and Audit Directive and Regulation (EU) No. 537/2014, the High Council for Statutory Audits (H3C), the audit oversight authority, is responsible for I&D processes for statutory auditors. The H3C recruited an independent prosecutor who oversees conducting investigations together with a team of five persons. The appeal to the decisions of H3C takes place before the Supreme Court (Conseil d’Etat). Sanctions are published once they are made anonymous or can be fully consulted at the regional disciplinary chamber. The list of the possible sanctions is limited and defined by the legal framework.

Despite not having the legal responsibility for I&D, CNCC conducted an assessment of H3C’s I&D policies and processes against the best practices of SMO 6 and identified a few areas for improvement, such as having a timeframe for disposal of all cases and an independent review of complaints.

To support its members with understanding the I&D processes in the jurisdiction, CNCC disseminates information on the I&D systems (including to the public) which includes information on procedures and consequences for non-compliance. For example, on September 20, 2022, CNCC organized a joint conference with H3C dedicated to explaining the I&D processes in place and exploring ways to enhance the procedures. The conference was open for the public and attracted more than 200 participants.

The CNCC is encouraged continue its support & advocacy with the H3C to strengthen I&D policies related to statutory auditors. It may continuing referring to the self-assessment against the best practices of SMO 6.

Current Status: Sustain

French accounting standards are developed and adopted by the Accounting Standards Authority (ANC), which is the body legally responsible for accounting standard-setting. The EU statutory framework has been transposed into national legislation by the ANC such that 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, 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 as French GAAP is considered fit for purpose.

The CNCC reports that, in collaboration with the Conseil National de l’Ordre des Experts-Comptables (CNOEC), 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 itself 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 CNOEC, supports IFRS implementation through the development and maintenance of a website dedicated to IFRS; the provision of training activities, including biennial technical conferences on IFRS and inclusion of comprehensive IFRS related issues in CPD courses; distribution of information on the standards through various means, such as its website, a quarterly newsletter on IFRS application, and its professional magazine; and lastly, CNCC responds 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 (EFRAG) on IFRS and related matters.

Current Status: Sustain