The statutory auditor (CAC) plays an essential role in the financial transparency of companies. The statutory audit of company and consolidated financial statements as part of its mandate is the most obvious form of this role. Financial auditing ensures security and confidence for executives, investors, and all stakeholders of the company.
Our firm, in its role as SA, prioritizes an agile and pragmatic approach, tailored to the size and level of structuring of the audited entity, in compliance with professional practice standards and the ode of Ethics. Beyond the statutory mission, we contribute to the improvement of your processes and the quality of your data analysis so that our services are a source of tangible added value.
With a resolute focus on digital technology, our audit strategy favours global data and process analysis to limit time-consuming, low value-added spot checks.
Wherever possible, we rely on internal control systems, our sector knowledge and discussions with the audit committee and finance department of the audited entity.
Firmly focused on digitalization, we prioritize data and comprehensive process analyses in our audit strategy to limit low-value and time-consuming sampling tests.
We rely as much as possible on the internal control system, our sectoral knowledge, and discussions with the audit committee and finance department of the audited entities.
The Objective of the Statutory Audit Mission
Opinion on the Financial Statements
The primary objective of the statutory audit mission is to verify that the annual financial statements, whether individual or consolidated, present a true and fair view of the financial position and assets of the audited entity, as well as the transactions of the past financial year. This assurance must be at a reasonable level.
This opinion is formulated with regard to the accounting framework applicable to the entity and the audited financial statements, namely the French standards derived from the ANC regulations for the individual and consolidated accounts of non-listed entities, and the IFRS framework for the consolidated accounts of entities that make a public call for savings or have adopted it voluntarily.
Assessment of Internal Control
As part of his mandate, the statutory auditor assesses the extent to which he can rely on the internal control system. This system is subject to detailed and thorough cycle reviews during each interim intervention, and recommendations are made for its improvement. These reviews also include cybersecurity audits aimed at testing IT security and its recovery capability in case of a cyberattack.
Specific Audits
As part of his mandate, the statutory auditor must examine compliance with certain legal provisions concerning information listed by law. For these topics, the SA is not required to apply auditing standards. Instead, he performs either a limited review or specific audits. These verifications and any potential information obligations are strictly defined by legal provisions; regulated agreements, equality between shareholders, management report, documents sent to shareholders, equity investments and control, payment deadlines, etc.
Fraud Prevention and Detection.
Although it is not an objective in itself, the audit approach implemented by the statutory auditor must enable the prevention and detection of potential fraud. he identifies and assesses the risks of material misstatements in the annual financial statements, whether due to fraud or error, defines and implements audit procedures to address these risks, and gather sufficient and appropriate evidence to support his opinion.
Appointment of a Statutory Auditor
Mandatory Designation
The appointment of a statutory auditor may be legally required due to the size of the company or group of companies. The applicable thresholds differ depending on whether the structures concerned are commercial companies, civil companies, or associations. The conditions for appointments are explained in detail in our dedicated article. Commercial companies or groups of companies must appoint a statutory auditor if they exceed 2 of the following 3 thresholds:
- 5 M€ balance sheet total,
- 10 M€ net turnover,
- 50 employees..
Voluntary appointment
Even if the legal thresholds are not reached, the shareholders of a commercial or civil company, an association or an economic interest group (EIG) may decide to appoint, on a voluntary basis, a statutory auditor whose mission is significantly different from that of an auditor. This appointment may follow a fundraising request by an investment fund or in the broader context of seeking significant financing.
Our Fields of Intervention in Statutory Audit
Client typology
The profile of our clients in statutory audit is very diverse. They include:
- Established family groups with national or international scope,
- Business build-ups,
- Subsidiaries of foreign groups,
- Regional SMEs,
- National or local associations.
We are involved in the certification of their individual or consolidated financial statements.
Sectors of Activity
In terms of statutory auditing, our clients primarily operate in the following sectors:
- Industry,
- Medical,
- Construction,
- Trading,
- Finance,
- Various services,
- Art market,
- Agri-food,
- Non-profit sector.
The Specificities of Our Audit Approach
Agility and Responsiveness
As a mid-sized firm, we have the capacity to respond quickly to our clients’ needs, particularly for services other than the certification of accounts, such as acquisition due diligence, attestations, or acting as an ad hoc statutory auditor for capital operations. Our agile structure also allows us to easily adapt to the characteristics, organizational constraints, and evolutions of our clients for the execution of our recurring audit mission.
Proximity and Client Relationship
We prioritize a close relationship with our clients while maintaining the independence inherent to our role. This trusted relationship allows us to better understand their challenges and provide attentive service, resulting from constructive exchanges with management and the financial direction.
Expertise and Versatility
Our teams consist of staff and partners with solid experience in the sectors of our audited clients. This technical and sectoral knowledge allows them to adopt an analytical and technical approach, minimizing the need for input from management and the financial direction on topics where the auditor’s expertise is expected.
Added Value
Although our mission is legal and prevents us from providing consultancy services, we conduct our mission in a way that delivers added value to our clients through our recommendations on internal control and the summaries of our audit work and account analysis.
The Conduct of the Statutory Audit Mission
Preliminary Analysis
The primary objectives of the preliminary analysis are:
- An in-depth understanding of the company’s environment, activities, specifics, and organization.
- Risk assessment: Identifying high-risk areas that require special attention.
For our first engagement, this preliminary analysis involves getting to know the audited company, its management, its IT environment, and its tools.
For existing clients, we perform interim interventions and regularly meet with management to stay informed about financial or operational developments since our last intervention and adjust our risk-based approach accordingly.
Customized Planning
The purpose of planning our mission is to allocate resources consistent with the work to be done, with expertise relevant to the sector concerned. It also considers the financial communication constraints and account closing dates of our clients.
Execution of Audit Procedures
Our audit procedures are designed to be both rigorous and flexible. We adapt our methods based on the size, sector, and specifics of each company while adhering to the professional standards to which we are subject.
During the interim intervention, if the company has implemented workflow and internal control processes, we focus our work on reviewing these internal procedures to:
- Map out the processes reflecting your activity, organization, and information systems.
- Evaluate these processes and determine to what extent we can rely on the data extractions from IT tools as part of our audit. It is also an opportunity to make recommendations for improving internal control.
These controls on processes integrated into your ERPs can be of various kinds: validation workflows, cost price or depreciation calculations, delegation management, data security, etc.
For the audit of the accounts themselves, we prefer a global analysis approach, combining the analysis of data from your information systems, the study of your analytical accounting, and management data, rather than targeted sampling tests. This approach is more value-adding and extensive in forming our opinion, whenever possible.
We also conduct substantive tests on each cycle based on the assessed risk and their material significance, in order to gather appropriate audit evidence.
Finally, we perform an analytical review of each financial cycle.
Use of Experts When Necessary
In the course of conducting our interim or final work, we may need to involve experts in specific areas, such as actuaries, specialists in niche sector evaluations, lawyers, IT professionals for cybersecurity audits, etc.
Conclusion and Report
Once the audit work is completed, we provide an opinion on the company’s financial statements and issue a report that includes the rationale for our assessment and the specific checks carried out, in accordance with the provisions of the commercial code based on the size and legal form of the audited entity.
The Contribution of the Statutory Auditor
We are convinced that, although our statutory audit mission is primarily a legal requirement, this should not prevent our clients from appreciating the added value of the work performed.
Financial statement certification is, of course, a source of transparency and trust for investors, banks, and business partners.
We strive to offer valuable recommendations on internal control and accounting closure processes to enhance their reliability, strengthen risk prevention, and improve operational efficiency.
By ensuring that the company complies with standards and regulations, particularly tax regulations, we help reduce the company’s exposure to tax risks.