The decree©is not surprising. It took only 3 days since the publication of the PACTE law in the Official Journal (OJ) on May 23, 2019 for the executive to take action©, which has been so discussed (or even contested) that© reporting on the thresholds of the statutory audit by the statutory auditors© (CAC) has been so much discussed© (or even contested©). ©Result: Commercial companies©©other than public interest entities©©must now©©only sign a CAC if they©exceed 2 of the following 3 thresholds©: 8 million turnover, 4 million balance sheets and 50 employees. same (cumulative©) thresholds for heads of unconsolidated groups (neither consolidated©group leader©nor HIA). For subsidiaries controlled© directly or indirectly by these group leaders, the following new thresholds apply: 4 million turnover, 2 million balance sheets and 25 employees©. It should be noted that this decree©of 26 May does not concern the PE (Small Business) audit©of the 3 financial years planned©for VSEs / SMEs. Conclusion: The auditor`s audit mandate has a high added value for many companies and their shareholders, particularly with regard to the prevention of difficulties, his analysis of the risk of fraud, his opinion on internal control procedures, etc. The thresholds for statutory audit by a statutory auditor will be raised in order to bring them into line with European standards. The legal certification of financial statements becomes mandatory only if the company exceeds two of the following three thresholds: SA, SARL, SAS, SCA. All commercial companies should be treated equally as regards statutory audit thresholds. This objective stated by Bruno Le Maire is found in the Pact bill (renamed Law on the growth and transformation of companies), published by the information site Context – contacted, the Ministry of Economy and Finance has neither confirmed nor denied being the author of this text.

These thresholds are set at the so-called European reference levels, which means that the document indicates 8 million euros of turnover, 4 million euros of balance sheet and 50 employees. However, they are only published by decree, even if this preliminary draft PACTE law mentions them in its explanatory memorandum. This decree will apply to SA and SCA from 1 January 2019 at the latest – no deadline is explicitly set for the new thresholds for other trading companies. It is stipulated that the mandates in force at the time of publication of the decree are valid until the end of the mandate referred to in Article L. 823-3 of the Commercial Code, i.e. until the end of the 6-year term of office of the auditor. These thresholds are identical regardless of the form of the company. On 17 May, thousands of examiners demonstrated in several cities in France. They protested against a provision in the PACTE law that removes skilled workers from the number of SMEs. Their anger was not heard.

The government has been determined to do what it has been proposing for several months. It intends to raise the thresholds triggering the obligation to appoint an auditor to the level of the European threshold in order to align them with EU rules. With the reform of the European audit in 2016, the mandatory audit threshold was set at €8 million in turnover; In France, it is now 3.1 million euros. It seemed to the administrators of the law that some companies could circumvent the thresholds by creating subsidiaries within their operations. For this reason, the reform aims to impose the application of the CAC to parent companies if the group exceeds the European thresholds. The auditors have not even completed the acclimatization to the European audit reform, implemented by the decree of 17 March 2016 that a new regulatory upheaval is already looming. This is a reform they have feared for more than ten years. It concerns the thresholds above which companies must have their accounts audited.

Historically, they have been relatively low in France (see box) because they reflect the economic fabric, which consists mainly of small enterprises. In total, the 13,000 French auditors share 220,000 mandates. The problem is that these thresholds are well below the European thresholds of 8 million turnover, 4 million balance sheets and 50 employees. An increase in the thresholds in France could affect up to 140,000 mandates! All SAS exceed two of the following three thresholds: €2 million in turnover, €1 million in balance sheet and 50 employees The bill on the growth and transformation of companies, led by Bruno Le Maire, is currently in 1st reading before the National Assembly and is particularly interested in the issue of thresholds in the company. Whether it is staffing thresholds or thresholds for the legal certification of financial statements, the PACTE bill invests many areas of the company to ease the restrictions on it. There is only one objective that motivates the government, and that is business growth. On the other side of the coin, this harmonization mechanism at the level of the parent company is accompanied by a change for SAS. Today, the parent company SAS or a subsidiary of a company — within the meaning of Articles L II and III. 233-16 of the French Commercial Code — are systematically required to appoint an auditor (Article L 227-9-1 of the French Commercial Code) for their company accounts.

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