Chapter II: Status of statutory auditors

Each statutory audit practice structure must meet the following requirements:

1° Have the means enabling the statutory auditor:

a) To adapt, according to the scope of the assignment, the time and human resources devoted to it as well as the techniques implemented;

b) To monitor compliance with the rules applicable to the profession and to carry out regular risk assessments;

c) To guarantee the continuity and regularity of its account certification activities, in particular through the use of appropriate systems, resources and procedures;

2° Implement:

a) Procedures ensuring that the conditions under which each statutory audit engagement is carried out comply with ethical requirements, in particular with regard to independence from the audited person or entity, and enabling safeguard measures to be decided quickly if they prove necessary;

b) Procedures ensuring the absence of any intervention by the shareholders or managers of the firm of statutory auditors and, where applicable, of the network that could compromise the independence and objectivity of the person referred to in the first paragraph of Article L. 822-9 ;

c) Procedures to ensure the control and protection of its information processing systems;

d) Mechanisms to ensure compliance with decisions and procedures defined within the practice structure ;

e) Procedures to ensure that the use of third parties, whether employees or experts, to carry out the work required under the certification engagement does not undermine the quality of the internal quality control provided for in j, or the ability of the High Council to monitor the statutory auditor's compliance with the regulations in force;

f) Procedures ensuring the management and recording of incidents that have or may have a serious impact on the quality of its account certification activities;

g) Procedures ensuring an appropriate remuneration policy, in particular through performance incentives guaranteeing the quality of the certification engagement. Income from services other than certification shall not be taken into account when assessing the performance and remuneration of persons participating in the certification engagement or in a position to influence its conduct;

h) Procedures enabling employees to report any breaches of the rules applicable to the profession and of Regulation (EU) No 537/2014;

i) Procedures enabling the performance of account certification engagements and the organisation of the file referred to in Article R. 823-10 and ensuring the training of employees as well as the supervision and control of their activities;

j) An internal quality control system, placed under the responsibility of a statutory auditor, a natural person, registered on the list mentioned in I of Article L. 822-1, ensuring in particular compliance with the requirements set out in i. This system is evaluated annually and the conclusions of this evaluation and any measures proposed to modify the system are kept for a period of six years;

3° Statutory auditors subject to the obligations of article L. 822-14 put in place a progressive rotation mechanism in accordance with Article 17(7) of Regulation (EU) No 537/2014;

4° Compile appropriate documentation on how it meets the requirements of this Article and disseminate it to its employees;

5° Keep a record for at least six years of all breaches of the regulations applicable to the profession, with the exception of minor breaches, and of their consequences as well as the measures taken to remedy them. These measures are the subject of an annual report communicated to the appropriate persons within the structure. Where the statutory auditor seeks advice from third parties, it shall keep a copy of this request and of the response obtained;

6° Keep any written complaint relating to the performance of an audit engagement for a period of six years.