Subsection 2: Certification of accounts

The professional practice standard relating to the audit of accounts carried out by several statutory auditors, approved by the Minister of Justice, is shown below:

. NEP-100. The audit of accounts carried out by several statutory auditors

Introduction

01. Where the audit of the accounts carried out for the purpose of certifying the accounts of an entity is performed by more than one statutory auditor, the statutory auditors constitute the statutory audit body.

02. In accordance with article L. 823-15 of the French Commercial Code, the statutory auditors shall jointly conduct an examination of the conditions and procedures for preparing the accounts in accordance with the requirements set out in a professional practice standard. A professional standard determines the principles for the allocation of the due diligence to be performed by each of the statutory auditors in the performance of their assignment.

03. The purpose of this standard is to define the principles governing the collegiate practice of auditing financial statements.

Allocation of work and joint review

>. 04. Each statutory auditor performs the work necessary to enable him to form an opinion on the entity's financial statements.

The statutory auditor takes into account the information gathered during the audit and the observations made during the audit. They shall take into account the information gathered during the audit procedures that they themselves have performed and the information gathered by the joint statutory auditors.

05. Each statutory auditor shall obtain an understanding of the entity and its environment, assess the risks of material misstatement at the level of the accounts taken as a whole and determine the materiality level(s) for the purpose of defining and formalising, with the other statutory auditors, in a concerted manner, their audit approach as well as the engagement plan and work programme necessary for its implementation.

06. The audit procedures required to implement the engagement plan and defined in the work programme are allocated among the statutory auditors in a concerted manner.

. 07. The allocation between the statutory auditors of the work required to carry out the audit of the accounts shall be balanced and carried out on the basis of criteria:

-quantitative, such as the volume of working hours estimated as necessary to carry out this work, the volume of hours allocated to one of the statutory auditors must not be disproportionate in comparison with those allocated to the other statutory auditors; and

-qualifications, such as the experience or qualifications of the members of the audit teams.

08. This allocation shall be modified regularly in whole or in part during the term of office in agreement between the statutory auditors.

09. On the basis of the information gathered during the performance of the audit procedures, the statutory auditors shall assess together, throughout the engagement, whether their assessment of the risk of material misstatement at the assertion level remains appropriate. If necessary, they modify the nature, timing or extent of the planned procedures. If necessary, they review the allocation of the procedures thus redefined.

10. Each statutory auditor shall review the work carried out by the joint statutory auditors.

. 11. This review enables him to assess whether:

-the work carried out by the joint statutory auditors:

-correspond to those defined at the time of the allocation or decided at the time of the reassessment of the risk of material misstatement at the assertion level;

-have made it possible to gather sufficient and appropriate information to enable it to reach conclusions on which to base its opinion on the financial statements;

-the conclusions reached by the joint auditors are relevant and consistent.

12. Each statutory auditor shall include in his file the elements of the review that support his assessment of the work carried out by the joint statutory auditors.

13. Based on its assessment of the work performed by the other statutory auditors and the conclusions reached by them, each statutory auditor shall determine whether additional audit procedures should be performed.

. 14. He shall discuss this with the other statutory auditors. Where appropriate, they shall agree on the nature, timing and extent of any additional procedures to be carried out.

> The other statutory auditors shall consult each other. 15. At the end of the audit, each statutory auditor shall perform analytical procedures to review the consistency of the accounts as a whole.

>. 16. He shall also verify the fairness and consistency with the accounts of the information given in connection with the approval of the accounts:

-in the report of the competent body to the body called upon to approve the accounts;

-where applicable, in the other documents sent to the members of the body called upon to approve the accounts.

Communication

17. The statutory auditors shall communicate with the bodies referred to in Article L. 823-16 of the Commercial Code together and in a concerted manner.

18. The same applies to any communication of material information to the entity's management.

Reports

19. The reports drawn up by the statutory auditors in application of legal and regulatory texts shall be signed by each statutory auditor.

They shall mention, for each statutory auditor, the name and address of the person responsible for the audit. They shall mention, for each statutory auditor, the information provided for in articles L. 822-9 and R. 822-56 of the Commercial Code.

20. When the statutory auditors have differing opinions, they shall mention this in the report.

Disputes between statutory auditors

21. If professional disputes arise in the course of the engagement, the statutory auditors shall apply the provisions of Article 8 of the profession's code of ethics.

Disagreements on the amount of remuneration

22. In the event of disagreement between the statutory auditors and the managers of the entity on the amount of remuneration, the statutory auditors shall apply the provisions of Article R. 823-18 of the Commercial Code.