L'appréhension de l'alerte par le Commissaire Aux Comptes

Summary

In this discussion, Lucas Aspar, Vice-President of the Regional Auditors' Association, explores the impact of changes to auditing requirements for small businesses, specifically the government's decision to raise thresholds for mandatory auditors. He critiques a report suggesting that auditors have minimal effect on business longevity and explains the importance of early intervention and audit procedures for corporate continuity. Aspar highlights the risks of reducing auditors in smaller firms, emphasizing their role in maintaining transparency and encouraging proactive management. The conversation stresses the auditor's value in preventing business difficulties and fostering accountability.

Takeaways

• 📉 The presence of auditors is not considered significantly beneficial for the long-term sustainability of small companies, as stated by the Ligier report commissioned by the French government.
• 📊 New regulations aim to align French audit thresholds with European standards, raising the requirement for an auditor to companies with over €8 million in revenue, €4 million in assets, or more than 50 employees.
• 📉 Four out of five companies that currently have auditors will no longer require them under the new rules, raising concerns about business oversight.
• 🚨 The alert procedure is viewed as marginal in the larger framework of business risk management and continuity of operations, often stopping at the first phase.
• 💡 The principle of continuity of operations is fundamental for financial reporting, with auditors needing to assess whether a company can continue operating for at least 12 months beyond the closing of accounts.
• ⚠️ The alert procedure triggers a formalized inquiry into a company's potential financial difficulties, but is often seen as a last-resort action when informal measures have failed.
• 👥 In simplified joint-stock companies (SAS), the alert procedure becomes public quickly, as there is no confidentiality after its initiation, unlike in public limited companies (SA).
• ⏳ Auditors play a crucial role in initiating dialogue with business leaders, which can help resolve issues before a formal alert procedure is necessary, potentially accelerating decision-making.
• 🔄 The link between the auditor and the business owner is important, offering both familiarity and independence, which allows for rational dialogue and quicker resolutions.
• 📉 Many alert procedures ultimately lead to collective insolvency proceedings, highlighting the failure of informal resolutions.

Q & A

What is the main subject of the discussion in this transcript?

The main subject of the discussion is the role and relevance of statutory auditors (commissaires aux comptes) in small companies, focusing on the impact of recent changes in French regulations, particularly the removal of mandatory audits for smaller businesses and the consequences for the prevention of financial difficulties.

What was the purpose of the report by Ligier mentioned in the transcript?

The report by Ligier, commissioned by the French Ministry of Finance, aimed to assess the significance of statutory auditors for the sustainability of small businesses. The conclusion was that the presence of auditors did not have a significant impact, which influenced the decision to increase the thresholds for mandatory audits in line with European standards.

How have the thresholds for appointing statutory auditors in France changed?

The thresholds have been raised so that only companies with a turnover exceeding 8 million euros, a total balance sheet exceeding 4 million euros, or more than 50 employees are required to appoint a statutory auditor. This means that four out of five companies that currently have auditors will no longer need one in the future.

What impact does the speaker believe the removal of statutory auditors will have on small businesses?

The speaker believes that the removal of statutory auditors will hinder the early detection and prevention of financial difficulties in small businesses. They argue that statutory auditors play a crucial role in ensuring continuity of operations and identifying risks before they escalate into major problems.

What is the 'procédure d'alerte' (alert procedure) discussed in the transcript?

The 'procédure d'alerte' is a formalized, structured process through which statutory auditors can raise concerns about a company's financial health. It involves several phases where the auditor questions company management and can escalate the issue to the board of directors or the court if necessary, to ensure corrective actions are taken.

Why does the speaker consider the 'procédure d'alerte' marginal in the broader system of business risk prevention?

The speaker considers the 'procédure d'alerte' marginal because it is rarely used and often results in collective procedures like bankruptcy once initiated. They argue that the real value lies in the informal dialogues between auditors and company leaders before the alert procedure is formally triggered.

What role does the principle of 'continuity of operations' play in auditing?

The principle of 'continuity of operations' assumes that the company will continue to operate for at least 12 months after the closing of its accounts. This principle is crucial for determining asset depreciation, avoiding unnecessary provisions for layoffs, and ensuring the company is not evaluated based on liquidation values. Auditors must constantly verify this assumption.

How does the speaker view the relationship between statutory auditors and company management?

The speaker views the relationship as both close and independent. Auditors often know the company well after years of working with it, but they maintain enough independence to provide objective advice and facilitate rational decision-making in times of difficulty. This balance allows auditors to act as trusted advisors while remaining impartial.

Why does the speaker oppose the idea of giving expert accountants the role of business risk prevention?

The speaker opposes this idea because expert accountants, unlike statutory auditors, do not have the necessary independence from the companies they work with. Accountants have contractual relationships with businesses, which can compromise their ability to provide objective risk assessments.

What alternatives does the speaker suggest for improving business risk prevention in the absence of statutory auditors?

The speaker suggests that the cost of statutory auditors could be adjusted based on the size of the company to make audits more affordable for smaller businesses. Another proposal is to ensure that auditors are still required for groups of companies, even if individual subsidiaries fall below the new thresholds, to prevent large, complex entities from avoiding audits.