With the publication of the regulatory part of the Commercial Code [1], a page in the history of the auditor’s office is finally closed. For a long time, this field has been marked by a strong legislative influence and characterised by a number of provisions that make it a French exception in many respects (joint audit, disclosure of criminal acts, whistleblowing procedure, etc.). But if these strong provisions marked our national particularities, they left the profession quite free to define its operating methods and in control of the controls to be carried out on its members. These times are now behind us. The standards of professional practice are “hard-wired” into the Commercial Code, including model letters and forms of politeness! One could smile if all this did not lead to a formal approach to things to the detriment of the substance. What happens to intuition, flair, professional judgement, strength of character, in short, the craft, in a process where the quality of control is assessed solely by compliance with procedures? Let us not blame the H3C for this: the IFAC audit standards, which are normally applicable in Europe, are rather more detailed than the French standards, which are the national version. Moreover, in a system where supervision is limited to setting the rules and verifying their correct application a posteriori, what other approach than a formal one is possible?


The question is how long this system of supervision will last. When all the major firms are caught up in the turmoil of the Madoff affair, the question will eventually arise as to whether we should not move from a posteriori supervision to a priori supervision, at least in regulated activities. This will be a tough debate, particularly on the question of where professional responsibility will lie. The dazzling return of the mixed economy, where the State (and not only ours) lends, invests, subsidises, caps salaries while waiting to set prices, recreates a new “public sector” that everyone would like to see as only temporary… without actually being so! Already, all the politicians are demanding with martial accents that there be a rigorous control of the public money used in this way. The legitimacy of the auditors of the “beneficiary” companies alone to do this seems to be excluded. We can therefore quickly see a pattern emerging, which is known to be the case in the social security sector: the auditors are progressively required to carry out work and produce reports not at the request of the audited entities but at the request of the Court of Auditors. Let us bet that the institution of the Rue Cambon will soon find an activity of control of the economic activity irrigated by public funds that it had lost with the nationalizations. The conclusion of the report on “public assistance to credit institutions” will not contradict us; we read that in a future report, the Court will make a financial assessment of the assistance provided to the State. How exactly would it do this without having access to the figures of the institutions concerned?


It is also to be expected, as some firms have already suggested, that institutional links will be created or strengthened between auditors and regulatory authorities of all kinds (AMF, ACAM, Commission Bancaire, etc.). One only has to read the chapter devoted to censorial control by the Commission Bancaire in its 2008 report [2]. What do we read there, if not :

  • the gradual creation of a specific regulation for bank auditors, through the Monetary and Financial Code;
  • the conditions for the Commission Bancaire to take real control of the key stages of the audit: appointment/recall of auditors, content of audits, information transmitted to the supervisory authority, etc.

Gradually, the censorship function shifts to the public sphere of regulation; little by little, the commissioners become the delegates not of the shareholders but of the regulatory bodies.

Dominique LEDOUBLE

[1] JO of 20 January 2009.
[2] The Commission Bancaire’s action with regard to external auditors – 2008 report p. 171 & s.




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