Audit Services in France
Financial Audit
What is a Financial Audit in France ?
A financial audit is an independent examination of financial statements and compliance with regulations to ensure accuracy, completeness, and adherence to accepted accounting principles and legal requirements. This process, essential for establishing trust among investors, creditors, and regulators, involves a thorough financial examination and reporting in accordance with French regulations. The objective is to provide an impartial assessment that the financial statements of an organization present a true and fair view of its financial performance and position. At the end of its mission an auditor will issue an audit report.
Companies also conduct internal audits but this is more common in listed groups.
Audit Services Provided for Businesses in France
In France, businesses may undergo two primary types of financial audits: statutory audits and voluntary audits. A statutory audit is mandatory once a company reaches certain thresholds concerning its balance sheet total, turnover, or headcount. This type of audit is legally required and must be performed by a “commissaire aux comptes,” registered with the French national auditors board, “Compagnie des commissaires aux comptes.” In contrast, a voluntary audit is not mandated by law and can be initiated by companies seeking a proactive review of specific aspects of their business or for consolidation purposes within a group. Voluntary audits can be conducted by a French CPA registered at the board of CPA “Ordre des experts comptables.”
It is important to note also that legal auditors are appointed for a 6 fiscal year missions whereas voluntary auditors are only appointed for one year. Services Provided by Accredited Auditors in France will also include day to day support to your business in order to confirm that you operate in a legal manner. For instance when a company has appointed a legal auditor he will issue a special report on equity related operations such as a share capital increase.
At L2A, we are qualified as both CPAs and Commissaires aux comptes, providing comprehensive audit services tailored to regulatory requirements and client needs.
When is a Legal Auditor Appointed?
The appointment of a legal auditor, or commissaire aux comptes, depends on several factors, including the legal form of the entity and specific financial thresholds which may vary based on whether the company is independent or part of a controlled group. These thresholds are designed to ensure that only entities reaching a significant size and impact are subject to this level of scrutiny, promoting transparency and trust without overburdening smaller entities.
Thresholds have recently changed in France as the government pushes to align them with the European Standards.
An independent company must appoint a legal auditor if it has reached the following thresholds :
Total balance sheet of 5 millions €.
Total Turnover of 10 millions €.
Total headcount of 50 people.
An entity controlled by another one such as a subsidiary of a group must appoint a legal auditor if it has reached the following thresholds :
Total balance sheet of 2.5 millions €.
Total Turnover of 5 millions €.
Total headcount of 25 people.
Choosing L2A ADVISORY as your english speaking auditor in France
L2A is a French audit firm that operates in English, accommodating the needs of international clients and businesses in France. Our team of English-speaking French auditors is proficient in handling various audit scenarios, ensuring compliance, and providing valuable insights into financial operations. Whether dealing with statutory requirements or proactive financial assessments, L2A delivers expertise and guidance every step of the way, ensuring that your business operations are verified, compliant, and strategically sound. We are used to conduct smooth and efficient audits for french subsidiaries of international groups. Wether it is for a recurring legal audit or a one time merger/transformation/contribution or acquisition audit, get in touch with our team in order to discuss your needs.
Mergers and asset contribution audits
When such a special audit should be conducted?
In case of an operation that affect shareholder, the french business law want to make sure that no one is left behind or suffer from a specific operation unfairly. That why an auditor should be appoint in many legal operation. If the company has a regular legal auditor he can conduct this mission or otherwise an auditor should be appointed just for this particular mission. As accredited auditors in France, L2A offers a range of specialized audit services beyond the classical legal audit mission. We are used to conducting this missions as one time duties also. These services include:
- Transformation Audit: This is required when a company changes its legal form and must appoint a “commissaire à la transformation” to ensure the transformation complies with legal requirements.
- Contribution Audit (Valuation Audit): Conducted when an investor makes a contribution to a company in a form other than cash (e.g., assets or shares from another company). This audit ensures that the valuation of non-cash contributions is fair and equitable, providing transparency and fairness in share distribution.
- Merger Audit: Required in mergers to review whether the process is equitable and compliant with regulations, protecting shareholder interests and ensuring that no party is disadvantaged unfairly.
On top of that we also propose to conduct acquisition audit and due diligences process in case of an investment in a French company.
Contact us !