Conseil Supérieur de l'Ordre des Experts-Comptables

The CNOEC has been developing and implementing quality control of its members since 1983. This system is fully integrated into the French law since the supervision of the profession by the OEC is provided for in Ordinance 45-2138 of 19 September 1945 and the principles and procedures of the quality control system set up by the CNOEC are included in the 1986 Decree (included in Decree 2012-432) and in the Order approving the Internal Rules of the OEC.

The CNOEC has completed its system of quality control process that includes:

• A self-assessment of compliance with the standards by the chartered accountant who is informed of the standards to be met on a permanent and continuous basis,
• A one-off inspection that can be carried out unexpectedly and whose procedures are provided for by regulation (Ministerial order). This specific mechanism is intended to identify breaches of professional standards (including quality management standards) and ethical rules.
• A quality control whose procedures are provided for by regulation (Ministerial Order) and whose aim is to assess the adequacy of the professional work and the organization of the firm with all the applicable requirements and standards, taking into account the practices of the profession. The 6-years frequency provided for by the international standard concerns the audit. In a concern of continuous quality improvement, the CNOEC aims to achieve this frequency.
• A specific anti-money laundering and counter-terrorist financing (AML/CFT) control which is carried out according to the level of exposure of the chartered accountant to AML/CFT risks and whose procedures are provided for in the regulation (Ministerial order). The aim is to assess the compliance of the professional work and the organization of the firm with the AML/CFT requirements.

Considering all these measures, the CNOEC carries out an ongoing monitoring of Chartered Accountants.

In order to assist its members in the implementation and application of the quality control standards, the CNOEC has transposed the ISQC1 standard into its normative reference framework and is currently working on updating its professional standard to integrate the new ISQM1 and ISQM2 concepts. In addition, it provides information and training to its members.

The QA review system set up by the CNOEC meets the requirements of the SMO1. It is constantly being improved, both in terms of its content and in terms of the technological means made available to the practitioners, the quality controllers, and the institutes. Dematerialised files and full web platforms allow for the management of control files, provide standardisation of control practices, security with regard to confidentiality, and improve administrative processes. The content of the control is updated as necessary.

CNOEC has Completed the transposition of the ISQM1 and ISQM2 standards into the French normative reference frame.

Current Status: Sustain

Initial professional development (IPD) requirements for chartered accountants are established in the Commercial Code (“Commissaires aux comptes”) and Decree 2012-432 of 2012 (Experts-comptables), and are implemented by the French universities, the Ministries of Higher Education, Justice, and Economy and Finance. The CNOEC and the CNCC report that the education requirements in place for all professional accountants meet the revised 2020 International Education Standard 7 (IES 7) requirements.

To be eligible to practice as a chartered accountant, 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). Subsequently, candidates must be registered with the OEC. Chartered accountants are then required to complete 120 hours of continuing professional development (CPD) over a 3-year rolling period.

To support the adoption and implementation of the IES requirements in the national accountancy curricula, the CNOEC and the CNCC are involved with the Ministry of Higher Education in defining the curricula content of the the accounting diplomas (DCG, bachelor's degree, and DSCG, master’s degree) and the modalities of the accounting examinations. Regarding the public accounting course, the CNOEC has full authority to determine the content of the program and the teaching format (in consultation with the CNCC for the audit part of the program). The DCG and DSCG programs were thoroughly overhauled and modernized in 2019 (based on Decree of 13 February 2019). This reform concerned the program of some teaching units and content, which is now broken down into skills and associated knowledge, to better correspond to the needs of the job market. Digital competencies have 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 IES, the Directive 2014/56/EU on statutory audits of annual accounts and consolidated accounts, and the Professional Accountancy Education Europe framework which aims to harmonize accounting curricula between European Member States.

The CNOEC has been a member of the Professional Accountancy Education Europe since it was originally established as the Common Content Prjoect in the 2000s on the initiative of the professional institutes of six EU Member States, including France (CNOEC and CNCC).

Current Status: Sustain

In accordance with the Ordinance No. 45-2138 of 1945, the CNOEC has responsibility for drafting auditing standards related to its members’ areas of work, which does not include statutory audits. CNOEC drafts standards for contractual audits and reviews of historical financial information, and other assurance and related services engagements, with approval from the Ministry of Economy, Finance and Budget. The standard-setting framework draws on international standard-setting provisions issued by the IAASB. The CNOEC indicates that the standards for contractual audits are the translated ISAs applicable as of July 2019 and the standard for auditing financial statements in a SME applicable since July 2017.In addition, CNOEC indicated that they are transposing the future International Standard on Auditing for Audits of Financial Statements of Less Complex Entities (IAASB standard "ISA for LCE") into the French normative reference frame.

To facilitate an ongoing adoption and implementation process, the CNOEC indicates that it:

• monitors new and amended standards issued by the IAASB ;
• proposes regular updates of professional standards to the line ministry. It is within this framework that the CNOEC has started to work on the convergence between its professional standard for quality control (NPMQ) and the new set of ISQM standards (ISQM1, ISQM2 and ISA 220) ;
• develops and updates application material ;
• disseminates information on updates to the standards and international developments in the field through books, articles and its website; and
• provides professional development activities.

Current Status: Sustain

The CNOEC is responsible for drafting the ethical requirements with its line ministry, the Ministry of Economy and Finance, which is also responsible for validating the texts. In 2012, the government approved by decree (Decree No. 2012-432 of 30 March 2012) the Code of Ethics that had been drafted by the CNOEC and its line ministry for professionals subject to its supervision (Decree No. 2007-1387 of 27 September 2007, now repealed). In addition, other ethical requirements are also laid down by national regulations.

The Code of Ethics cannot be directly compared with the IESBA Code of Ethics, due to its different structure. Additionally, the IESBA Code does not include all the texts dealing with ethical issues that a chartered accountant may encounter as other texts issued by the CNOEC and/or the Ministry do. Furthermore, the French Code of Ethics does not include the provisions of Part 2 of the IESBA Code of Ethics because French regulations specify that, subject to provisions to the contrary, chartered accountants in business are not subject to the legal and regulatory requirements relating to the activity of public accounting.

While the intent of these two codes seems identical, their transcription into law is differs and does not allow for a strict alignment of their content.

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. CNOEC is encouraged to indicate any planned actions aimed at raising awareness of the IESBA Code to relevant stakeholders.

Current Status: Review & Improve

The CNOEC 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 under the authority of the Ministry of Public Accounts. As reported by CNOEC, IPSAS have not been adopted in France but they are considered as one of the references for establishing standards.

The CNOEC states its activities in this area include: (i) participation in the CNOCP’s working group to provide comments to the IPSASB’s exposure drafts and other pronouncements; (ii) advocating 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 CPD programs; and (iv) assisting the CNOCP in the translation of the 2018 IPSAS Handbook.

Current Status: Sustain

The system of investigation and discipline of chartered accountants is set out in Ordinance No 45-2138 of 19 September 1945 and supplemented by Decree 2012-432 of 30 March 2012 and the Decree of 19 January 2022 approving the internal regulations of the OEC.

The system is based on regional disciplinary chambers that are fully integrated into the French judicial system and are composed of two chartered accountants from the CROEC and a magistrate from the judiciary. The Government Commissioner (or representative) to the CROEC represents the supervision of the profession, observes each case, and attends hearings.

An appeal against a decision by a regional disciplinary chamber is brought before the national disciplinary chamber, which is made up of two chartered accountants from the CNOEC, representatives of the Ministry of Economy and Finance and a magistrate from the judiciary. The Government Commissioner (or representative) to the CROEC represents the supervision of the profession, observes each case, and attends hearings. Appeals against the decisions of the national disciplinary chamber are brought before 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.

CNOEC provides information on its I&D processes to its members through its magazine to enhance the understanding of the disciplinary procedures; organizes training; and also publishes the annual activity report of the national disciplinary chamber. CNOEC has published notes on the disciplinary procedure and procedural flaws, the disciplinary treatment of tax offences committed by chartered accountants, and timelines for handling disciplinary cases.

Current Status: Sustain

French accounting standards are developed by the Accounting Standards Authority (ANC), which is the legal body responsible for drafting them, and are approved by ministerial order. In accordance with the EU regulatory framework, listed entities are required to apply EU-endorsed IFRS for their consolidated financial statements. In addition, all other companies are allowed to apply IFRS for their consolidated financial statements. However, entities are not allowed to apply IFRS for the preparation of their individual financial statements, and must use French accounting standards (French GAAP). The ANC has concluded that there is no demand for IFRS for SMEs in France as French GAAP are considered to be appropriate.

The CNOEC indicates that it has promoted the adoption of IFRS at the ANC by participating in various working groups set up by the national accounting standard setter. In addition, while the CNOEC itself is no longer a direct member of the ANC, chartered accountants can be members of the ANC, its committees and working groups that help support the ANC's standard setting work.

Among its members, the CNOEC supports the implementation of IFRS by developing and maintaining a dedicated IFRS website; distributing information on the standards through various means, such as its website, its quarterly newsletter on IFRS implementation and its monthly professional magazines; and answering technical questions from its members on IFRS.

The CNOEC states that it assists the ANC and Accountancy Europe in developing responses to public consultations issued by the IASB and/or the European Financial Advisory Group (EFRAG) on IFRS and related issues.

Current Status: Sustain