Key Benefits:
The Guard of Seals, Minister of Justice and Freedoms,
Vu le Commercial code, including articles L. 821-1, L. 821-2 and R. 821-11 ;
In view of the draft professional exercise standard developed by the National Board of Auditors and handed over to the seals, Minister of Justice and Freedoms, on April 13, 2011;
In the light of the opinion of the Office of the High Board of Auditors of 24 May 2011,
Stop it!
The professional exercise standard for the report of the Auditor established pursuant to Articles L. 225-235 and L. 226-10-1 of the Commercial Code on the president's report is approved.
Section A. 823-29 of the Commercial Code is replaced by the following provisions:
"Art. A. 823-29.-The professional exercise standard for the report of the External Auditor pursuant to sections L. 225-235 and L. 226-10-1 on the report of the President, approved by the Seal Guard, Minister of Justice, is shown below:
REPORT OF THE COMMITMENT TO ACCOUNTS UNDER ARTICLES L. 225-235 AND L. 226-10-1 ON THE REPORT OF THE CHAIRMAN
Introduction
1. Pursuant to sections L. 225-235 and L. 226-10-1, the External Auditor:
― submits, in a report attached to its annual accounts report or, where appropriate, its consolidated accounts report, its comments on the report of the President referred to in sections L. 225-37, L. 225-68 and L. 226-10-1, for those of the internal control and risk management procedures that are related to the development and processing of accounting and financial information;
― attests to the establishment of other information required under sections L. 225-37, L. 225-68 and L. 226-10-1 to be included in the Chairperson's report.
2. These provisions apply to any auditor when he or she carries out his or her certification mission in an anonymous company, a share-sponsored company or a European company, whose financial securities are admitted to negotiations on a regulated market.
3. The purpose of this standard is to define the principles relating to the establishment by the External Auditor of his report on the President's report.
Reminder of obligations
President and Society
4. Pursuant to sections L. 225-37, L. 225-68 or L. 226-10-1, the Chair of the Board of Directors or the Chair of the Supervisory Board shall report to the General Assembly, together with the report of the Board of Directors, the Director or the Manager, as follows:
- the composition, conditions for the preparation and organization of the work of the Board of Directors or the Supervisory Board, as the case may be, as well as the procedures for internal control and risk management established by the company, including those of these procedures that are related to the development and processing of accounting and financial information for social accounts and, where applicable, for consolidated accounts;
– any limitations that the Board of Directors brings to the Director General's powers;
– when the company voluntarily refers to a corporate government code developed by the representative organizations of the companies, the provisions that have been excluded and the reasons for which they have been drawn, and the place where this code can be consulted;
– if the company does not refer to such a code, the rules adopted in addition to the requirements required by law and the reasons why the company has decided to not apply any provision of a corporate government code;
- the specific terms and conditions relating to the participation of shareholders in the general assembly, the report that may proceed by reference to the provisions of the statutes that provide for these terms.
In anonymous companies, this report also presents the principles and rules established by the Board of Directors or the Supervisory Board to determine the remuneration and benefits of any kind granted to social agents and mentions the publication of the information provided for in section L. 225-100-3 relating to elements that may have an impact on public offer.
5. This report is approved by the Board of Directors or the Supervisory Board and is made public.
Disclosures in the Chair's report on internal control and risk management procedures related to the development and processing of accounting and financial information
6. The internal control and risk management procedures that are related to the development and processing of accounting and financial information are consistent with those that enable the company to produce, under conditions that can ensure its reliability, accounts and information on the financial situation and those accounts. This information is derived from intermediary accounts or annual or consolidated accounts, or from data used in the preparation of these accounts.
7. The intervention of the External Auditor is not to assess the internal control and risk management procedures as such but to assess the sincerity of the information contained in the President's report on the internal control and risk management procedures that are related to the development and processing of accounting and financial information.
To do so, the Auditor:
― takes note of the procedures for internal control and risk management that are related to the development and processing of accounting and financial information underpinning the information presented in the President's report and consults the existing documentation;
― takes note of the work that has been able to develop this information and consults the existing documentation;
― determines whether the major deficiencies in the internal control and risk management procedures that are related to the development and processing of the accounting and financial information it would have identified in its mission are the subject of appropriate information in the Chair's report.
The major deficiencies in internal control and risk management procedures are significant weaknesses in internal control within the meaning of the standard for communicating weaknesses in internal control, which are such that they can lead to a significant anomaly in accounting and financial information whose market knowledge is likely to have a significant impact on the course of financial instruments issued by the company.
8. When, at the end of its work, the External Auditor reports in the Chair's report on the internal control and risk management procedures that are related to the development and processing of accounting and financial information that do not correspond to his or her own findings or where such information is not sincere or insufficiently justified, he or she shall consult with the Chair on the effect of obtaining the necessary amendments. If he fails to obtain satisfaction, he makes the observations he considers necessary in his report.
These observations may include:
- the description of the internal control and risk management procedures that are related to the development and processing of accounting and financial information;
― the absence of available elements allowing it to appreciate certain information contained without the president's report;
- the omission of major deficiencies in the internal control and risk management procedures that are related to the development and processing of the accounting and financial information that it would have identified in its mission.
9. When the External Auditor is required to make comments in his report, he shall bring them to the attention of the collegial body responsible for the administration or body responsible for the management and oversight body, as well as, where appropriate, the specialized committee acting under the exclusive and collective responsibility of those bodies.
Other information
10. The External Auditor shall verify that information, other than those relating to internal control and risk management procedures that are relevant to the development and processing of accounting and financial information, as required in sections L. 225-37, L. 225-68 and L. 226-10-1 are contained in the report of the Chair. If this is not the case, he shall consult with the president to obtain the necessary supplements. Failing to obtain these supplements, he noted in his report the irregularity constituted by the absence of some of this information.
11. The Accounts Commissioner does not have to verify the sincerity of information, other than those relating to internal control and risk management procedures relating to the development and processing of accounting and financial information contained in the President's report, whether such information is required by sections L. 225-37, L. 225-68 and L. 226-10-1 or not; In particular, it does not have to be aware of the work that has led to the development of this other information or of the available documentation.
However, his reading of the President ' s report allows him to identify, where appropriate, the information that would appear to him clearly inconsistent. In such a situation, he met with the president to obtain the necessary modifications. In the absence of satisfaction, the External Auditor shall make an observation in his report on the manifestly inconsistent nature of such other information.
Report of the External Auditor
Report of the President
12. The report of the Auditor includes the following:
a title;
the recipient of the report;
- an introductory paragraph that includes a reminder of its status as an External Auditor, the objectives of its intervention and the applicable law, the identification of the President's report and the relevant fiscal year;
In a section on information on internal control and risk management procedures that are related to the development and processing of accounting and financial information:
a paragraph with a description of the diligences it has implemented in accordance with professional practice standards;
– a conclusion in the form of observations, or on the contrary, of the absence of comments, to express on the information contained in the President's report on the internal control and risk management procedures that are related to the development and processing of accounting and financial information;
In a section on other information:
an attestation of the establishment of the other information required under sections L. 225-37, L. 225-68 and L. 226-10-1, or, if not, the indication of the irregularity constituted by the absence of some of the information;
- where appropriate, its observations on the manifestly inconsistent nature of other information;
the date of the report;
- the address and identification of the signatory(s) of the report.
13. Where the President does not prepare the report under the above-mentioned legal provisions, or does not report in this report on the internal control and risk management procedures that are related to the development and processing of accounting and financial information, the Auditor shall, in the report provided for in section L. 225-235, make an observation that it is unable to conclude and mention the corresponding irregularity as noted.
Hypothesis of a Chair's report that includes an assessment of internal control or risk management procedures related to the development and processing of accounting and financial information
14. The External Auditor shall implement, on information relating to the assessment of internal control or risk management procedures that are related to the development and processing of accounting and financial information, the diligence set out in this standard. In addition, it:
― becomes aware of the assessment process and its documentation;
― and appreciates the quality and sufficiency of the existing documentation.
15. Where applicable, the External Auditor shall, in his report, provide information on the evaluation of internal control or risk management procedures that are related to the development and processing of accounting and financial information, the comments set out in this standard, which may also be related to:
- to the President's assessment of the adequacy and effectiveness of internal control or risk management procedures related to the development and processing of accounting and financial information;
- the reasons why the diligences it has implemented in accordance with this standard do not allow it to decide on this information. »
The present order will be issued in the Official Journal of the French Republic.
Done on 21 June 2011.
For the Minister and by delegation:
The Director of Civil Affairs
and the seal,
L. Vallée
