The Loi Pacte, enacted in 2019, has profoundly altered the landscape of statutory auditing in France. This ambitious reform aims to simplify life for companies while strengthening their competitiveness. For audit professionals, it entails significant changes to their missions and organization. Let’s take a closer look at the major impacts of this law on statutory auditing.
The main objectives of the Loi Pacte for auditing
The Loi Pacte, an acronym for the Plan d’Action pour la Croissance et la Transformation des Entreprises (Action Plan for Business Growth and Transformation), has a number of objectives for statutory auditing. It seeks to lighten the administrative obligations of small and medium-sized enterprises (SMEs), while preserving the quality of financial information.
Notable changes include :
- higher thresholds for statutory audits
- elimination of the statutory audit requirement for certain entities
- The introduction of new missions for auditors
These changes are designed to adapt the regulatory framework to current economic realities. They are part of a drive to modernize the French business fabric, while maintaining a high level of confidence in corporate financial statements.
For audit firms, these changes imply a necessary adaptation of their practices and service offering. They must now offer more diversified, tailor-made services to meet the specific needs of each company. In this context, it is essential for these professionals to have high-performance tools to manage their customer relations, such as the best contact form plugins for their website.
Increased thresholds and impact on mandates
One of the flagship measures of the Loi Pacte concerns the raising of statutory audit thresholds. This decision has had a considerable impact on the number of companies subject to the obligation to appoint a statutory auditor (CAC).
Here is a summary table of the new thresholds:
| Criterion | Old threshold | New threshold |
|---|---|---|
| Balance sheet total | 1 550 000 € | 4 000 000 € |
| Sales before tax | 3 100 000 € | 8 000 000 € |
| Number of employees | 50 | 50 |
This increase in thresholds has led to a significant reduction in the number of companies subject to compulsory statutory audit. It is estimated that around 150,000 statutory audit mandates were abolished as a result of this reform.
For audit firms, this change has necessitated an in-depth rethink of their business model. They have had to rethink their service offering to adapt to this new context, in particular by developing more targeted consulting and support missions.
New missions and opportunities for auditors
Faced with the reduction in the scope of the mandatory statutory audit, the Loi Pacte has introduced new missions for statutory auditors. These missions aim to maintain a high level of financial security while offering companies greater flexibility.
These new missions include:
- Statutory audit of small businesses (ALPE)
- Services other than the certification of accounts (SACC)
- Tax compliance review engagements
- Cybersecurity certification
Thelegal audit of small companies (ALPE) is an engagement adapted to SMEs which are no longer subject to the legal audit obligation, but wish to benefit from a review of their accounts. This assignment, which is lighter than a full audit, makes it possible to secure financial information at a lower cost.
Services other than the certification of accounts (SACC) offer auditors the opportunity to diversify their activities. They can include consulting, support for digital transformation or risk assessment.
These new missions representopportunities for audit firms to reinvent themselves and offer higher value-added services. They do, however, require the sector’s professionals to adapt their skills and working methods.
Challenges and prospects for the auditing profession
The Loi Pacte has undeniably shaken up the landscape of statutory auditing in France. It poses many challenges for the profession, but also opens up interesting prospects for its evolution.
Among the main challenges are:
- The need to diversify auditor skills
- The need to digitalize auditing practices
- The need to reinforce the added value of audit assignments
- The importance of effectively communicating the auditor’s role
Faced with these challenges, the profession is mobilizing. Professional bodies such as the Compagnie Nationale des Commissaires aux Comptes (CNCC) are supporting their members in this transition. Training courses are offered to develop new areas of expertise, notably in cybersecurity, CSR and data analysis.
The COVID-19 health crisis has highlighted the crucial importance of auditing in securing financial information. It also accelerated the digital transformation of audit firms, paving the way for new, more agile and efficient working methods.
In the future, the role of the auditor could evolve into that of a strategic partner to companies, capable of providing a global vision of risks and opportunities. This evolution will require ongoing adaptation of skills and tools, but offers promising prospects for the profession.
Ultimately, the Loi Pacte has initiated a profound transformation of statutory auditing in France. While it has called into question certain established practices, it has also paved the way for a much-needed modernization of the profession. The challenge for auditors is now to seize these opportunities to assert their essential role in economic confidence and business performance.
