Duties and Powers of Statutory Auditors in France

The statutory auditor (commissaire aux comptes, or CAC) is not just a financial watchdog. In French companies, their mission is carefully framed by the Commercial Code and has been further clarified by case law and professional standards. Their role goes beyond a technical review of accounts: it includes permanent monitoring, verification of management reporting, risk analysis, alert procedures, and obligations to report criminal facts or compliance breaches.

This comprehensive role ensures transparency, protects shareholders and third parties, and strengthens trust in French companies.

The duties of the statutory auditor are clearly established, and they are granted the authority and prerogatives required to fulfil them.

1. The Duties of the Commissaires aux Comptes in France

1.1 Permanent Oversight: A Continuous Mission of the Statutory Auditors

The statutory auditor’s mission is not occasional. It is a permanent control duty (Commercial Code, art. L.821-54), meaning that from the day of appointment until the end of the mandate, the CAC remains vigilant.

• Scope of control: The auditor verifies accounting values, supporting documents, and compliance of the company’s accounts with French rules and standards.
• Management reporting: They check the sincerity and consistency of the information provided in the managers’ annual report, and in documents distributed to shareholders.
• Consolidated accounts: If the company prepares group accounts, the auditor verifies consistency and sincerity of group reporting.
• Equality among shareholders: The CAC must ensure that equal treatment of shareholders is respected, a crucial protection for minority investors (Commercial Code, art. L.821-56).

Case law reminder: Auditors cannot argue that their role is purely retrospective. The Court of Cassation has ruled that their liability may be engaged even before their report is issued, if irregularities or misconduct should have been identified (Cass. com., 19 Oct. 1999).

1.2 Certification of Annual Accounts

The primary mission of statutory auditors is the certification of accounts (Commercial Code, arts. L.821-53 and L.821-54).

Key Elements of Certification

• True and fair view: Auditors must certify that the annual accounts are regular, sincere, and give a true and fair view of results, financial position, and assets.
• Obligation of means: Auditors are not required to verify every single entry. They must apply professional judgment and obtain sufficient evidence to provide reasonable assurance (Cass. com., 23 June 2015).
• Temporary refusal: If essential justifications are missing, auditors may temporarily refuse certification without incurring civil liability (Cass. com., 18 Feb. 2014).

This responsibility balances rigor with practicality: companies must expect a high level of scrutiny, but not exhaustive verification of every transaction.

1.3 Certification of Consolidated Accounts

Where companies are part of a group that prepares consolidated accounts, auditors have an additional duty: to certify that group accounts are regular, sincere, and give a true and fair view of the group’s assets, financial position, and results (Commercial Code, art. L.821-53, para. 2).

Auditors rely partly on the work of auditors of subsidiaries, but remain responsible for forming their own independent opinion on the group as a whole.

1.4 Reports to the General Meeting

Each year, the statutory auditor issues a report to the general meeting of shareholders, covering:

• certification of accounts,
• verification of values and accounting documents,
• sincerity of information provided in the management report.

1.5 Reports in Crisis Situations

The form of audit reports may evolve in response to global events:

• During the Covid-19 crisis, auditors had to highlight the exceptional impacts of the pandemic.
• In the context of the Ukraine/Russia conflict, the CNCC instructed auditors not to include generic references, but to evaluate impacts case by case depending on the audited entity.

This shows the adaptive role of the CAC in providing transparency, even in uncertain environments.

1.6 Risk Reports under the ALPE Mission

For small enterprises subject to an ALPE audit mission (3 years instead of 6), auditors must produce a report on financial, accounting, and management risks (Commercial Code, art. L.821-57).

• Scope: For group heads, this covers not just the parent company but also its subsidiaries.
• Communication: Auditors of subsidiaries must transmit their own risk reports to the group auditor.
• Content: Reports are tailored to the specific risks of the entity and may include recommendations to reduce risks.
• Frequency: Must be produced annually, not every three years.

This risk-based approach ensures that even smaller companies benefit from forward-looking risk assessments, rather than a purely retrospective review.

1.7 Verification of the Management Report

The management report is a key document reviewed by the statutory auditor.

• Requirement: companies with a CAC must transmit their management report (Commercial Code, arts. L.232-1 and R.232-1).
• Exemption: Small enterprises (PEs) are exempt from preparing one.
• Checks: Auditors verify both:
  • information linked to accounts (balance sheets, ledgers, account extracts), and
  • “other information” (narrative or qualitative data).

If inconsistencies or omissions are identified, the CAC requires corrections. If uncorrected, the auditor must decide whether they affect judgment and adapt their opinion accordingly.

Auditors also verify:

• information on payment deadlines (Commercial Code, art. L.441-14),
• completeness of legally required information.

1.8 Monitoring and Alert Duties

Beyond account certification, statutory auditors are guardians of continuity and legality.

a) Alert on Going Concern

If facts are identified that may threaten the company’s survival, auditors must trigger an alert procedure (Commercial Code, art. L.234-2).

• If the alert proves unfounded, the CAC cannot be accused of bad faith (CA Aix-en-Provence, 17 June 2021).

b) Reporting Criminal Acts

Auditors must disclose to the public prosecutor any criminal acts uncovered, such as:

• misuse of corporate assets (abus de biens sociaux),
• failure to file accounts.

Failure to disclose is punishable by 5 years in prison and a €75,000 fine (Commercial Code, art. L.821-9).

c) Payment Delays

In cases of large companies (over 250 employees with turnover > €50M or balance sheet > €43M), repeated breaches of payment deadlines must be reported to the Minister of Economy.

d) Information Rights

Auditors must receive:

• shareholder questions and managers’ responses on continuity,
• expert reports on management operations,
• alerts from the Social and Economic Committee (CSE).

1.9 Other Duties

• Liquidation: During liquidation, transfers of assets to former managers require CAC involvement and court approval.
• AML/CTF: Auditors must comply with anti-money laundering and counter-terrorism financing (AML/CTF) duties, reporting suspicious transactions to Tracfin.

Key Takeaways

The statutory audit mission in French companies is broad and multifaceted:

• Financial oversight: permanent control of accounts and certification.
• Risk analysis: proactive reporting under ALPE missions.
• Corporate governance: ensuring fairness between shareholders and accuracy of management reporting.
• Compliance duties: triggering alerts, reporting crimes, monitoring payment practices.
• Public interest role: contributing to AML/CTF efforts and ensuring transparency in crises.

By combining financial certification with oversight and alert duties, statutory auditors serve as cornerstones of transparency, sustainability, and legal compliance in French business life.

2. Powers of Statutory Auditors in French Companies: Control, Investigation, and Sanctions

The statutory auditor (commissaire aux comptes, CAC) is not a passive figure in French company law. Once appointed, auditors are vested with strong legal powers of investigation and communication, enabling them to fully exercise their oversight mission and ensure the reliability of accounts. Their prerogatives are backed by sanctions, ensuring compliance by managers and protection for shareholders and third parties.

2.1 Right of Control and Verification

Auditors may carry out any checks at any time of the year. This broad power means:

• unrestricted access to contracts, books, accounting records, and minutes;
• freedom to decide what documents are useful to their mission;
• no limitation to year-end controls — oversight is continuous.

This permanent right of control ensures that fraud or irregularities cannot hide behind timing or restricted access.

2.2 Assistance and Collegial Control

Auditors are allowed to appoint experts or collaborators of their choice to assist them, under their responsibility. These assistants enjoy the same investigative rights as the auditor. This allows complex cases (such as international contracts or IT systems) to be reviewed with specialist input.

When two statutory auditors are required, they must perform a joint contradictory examination of the accounts. Although they may work separately, they must issue a common report. In case of disagreement, the report must transparently state the differing opinions. This collegial approach strengthens reliability and independence.

2.3 Access to General Meetings

Auditors must be notified of all shareholder meetings at the same time as partners. They also:

• have the right to attend general meetings,
• may convene a general meeting themselves in case of manager failure, especially when equity falls below half the share capital,
• and, in case of death of the sole manager, can convene the assembly within 8 days to ensure a swift replacement.

These rights make the CAC an active player in corporate governance, not just an external checker.

2.4 Right to Accounts and Reports 

At least one month before the annual meeting, auditors must be given access to:

• annual accounts,
• management reports,
• consolidated accounts (if any),
• and group management reports.

They must also be informed of:

• regulated agreements within one month of their conclusion,
• the continuation of agreements from prior years,
• and the manager’s responses to shareholders’ written questions.

This obligation guarantees that auditors can prepare their reports with complete and up-to-date information.

2.5 Investigative Powers of the Statutory Auditors

The auditor’s prerogatives extend beyond the audited company itself:

• They may investigate parent companies, subsidiaries, and consolidated entities.
• They may collect information from third parties (suppliers, customers, banks, lawyers), although access to third-party documents requires judicial authorisation.
• Professional secrecy cannot be invoked against them, except by legal professionals such as lawyers.

Auditors often request management representations, formal written statements confirming compliance or disclosures. They may then cross-check these statements with third-party confirmations under NEP 505.

This combination of rights makes the CAC a powerful guarantor of transparency and fairness.

2.6 Sanctions for Obstruction of the Work of Statutory Auditors

The law imposes criminal penalties on managers or staff who obstruct auditors:

• Failure to convene the CAC to meetings → up to 2 years’ imprisonment and a €30,000 fine.
• Obstruction of verifications or refusal to provide documents → up to 5 years’ imprisonment and a €75,000 fine.

These severe penalties underline the importance of cooperation with auditors and the legal recognition of their role as guardians of financial integrity.

Key Takeaways

The statutory auditor in French companies is vested with broad prerogatives:

• free access to documents at any time,
• the right to attend or even convene meetings,
• authority to investigate parent companies, subsidiaries, and third parties,
• and the possibility of sanctioning obstruction with heavy criminal consequences.

These powers ensure that statutory auditors are not merely figureheads but active protectors of financial truth and shareholder equality. Their presence reinforces confidence in French companies, both for investors and for the broader business environment.