The great anger of the auditors

We don't often see them marching in the streets. On May 17, they will be in Paris, Lille, Strasbourg, Lyon, Marseille, Toulouse and Nantes to demonstrate. The auditors are not happy. What are they angry about? Bercy's decision to abolish the obligation to certify accounts in small and medium-sized companies. This reform is part of the Pact law, the "action plan for the growth and transformation of the company". A provision announced as a simplification measure for companies.

This measure is obviously not to the liking of these professionals, who are convinced that they are being "assassinated". "We are an anxious and angry profession," explains Jean Bouquot, president of the Compagnie nationale des commissaires aux comptes (CNCC).

Increasing the thresholds

What will happen in practice? The government will raise the thresholds triggering the obligation to appoint an auditor to the current level of what is practiced elsewhere in Europe. The audit reform in 2016 set the threshold for mandatory statutory auditing on the continent at €8 million in revenue; it is, today, €3.1 million in France. 3.1 million in France. "There is something totally surreal in France," said Bruno Le Maire, Minister of the Economy. "We say that SMEs must grow, but as soon as they do, we add obligations, and then we complain that they don't grow.

Social consequences

For the auditors, these measures will cause a real cataclysm. The profession is expected to lose a quarter of its mandates, or 620 million euros in revenue out of a total of 2.7 billion, according to a report by the General Inspectorate of Finance (IGF). The reform would lead to a redundancy plan affecting between 6,000 and 7,000 employees who would lose their jobs. It would affect 3,500 professionals who carry out 75 to 100% of their activity in the mandates affected by this measure.

The auditors also point out the risk that this project presents for the proper functioning of our economy. They point out that they fulfill missions of general interest. In particular, they are obliged to trigger a warning procedure when economic difficulties arise in a company. They must also reveal criminal acts to the law. This is a way to preserve activity and employment in France and to fight against fraud which is rampant in SMEs.

"The previous legislator was not so stupid. Very rationally, he adapted the audit thresholds to the structure of our economy. Because small and medium-sized companies account for almost 60% of the added value produced in our country. It is dangerous to believe that each state does not have to adapt the European objectives to its own realities," explains Jean-Luc Flabeau, President of ECF (Experts-Comptables et Commissaires de France). In Germany, the thresholds are higher because there are far fewer small companies.

Back machine

In fact, the European countries whose audit thresholds were recently raised are already backtracking, according to the auditors. This is the case in Sweden, Denmark and Italy. "This is a step backwards in view of the increase in accounting errors and their consequences on the tax and social security base. Not to mention the risk of loss of confidence resulting from more opaque financial information. It was expected to be a gain for companies. The opposite is true," continues Jean-Luc Flabeau.

Bercy, however, seems quite determined: its priority remains that of reducing the costs for small and medium-sized companies. The end of the obligation to submit to the verdict of an auditor would represent an average saving of 5,500 euros per year, according to the work of the Inspection générale des Finances (IGF).

Rethinking the future of the profession

To avoid too many job losses, the government has, however, launched a mission on the future of the profession. This mission has been entrusted to a group of experts and placed under the chairmanship of Patrick de Cambourg, president since 2015 of the ANC (Accounting Standards Authority).

For statutory auditors, the challenge will now be to reinvent their profession. Jean Bouquot has already made some proposals. "In SMEs, the statutory auditor could play the role of legal auditor. He would continue to give his opinion on the accounts, but focusing only on this point. He could also give a very useful assessment of internal control, the company's strengths and weaknesses, and solvency, excluding any legal verification.

Going further:

Your rights: https://www.service-public.fr/professionnels-entreprises/vosdroits/F31440

Article economie.gouv : https://www.economie.gouv.fr/entreprises/entreprise-commissaire-compte-obligatoire

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