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New Audit Thresholds Leading to New Audit Standards Applied to SMEs in France

By Carole Hong Tran and Dominique Le Roi, FIDAG SARL

In France, since the introduction of the new law on audit thresholds adopted in May 2019, a number of SMEs are now exempt from statutory audit. A new audit mission has therefore been designed especially for those still wishing to have their annual accounts certified by an auditor, known as Audit Légal des Petites Entreprises (“ALPE”), which offers the following advantages:

  • being optional (appointed on a voluntary basis by the company);
  • less constraining (simplification or reducing of audit diligence requirements and formalities); and
  • shorter (assignment limited to three financial years, instead of six).

ALPE has been the subject of a single, autonomous professional standards applicable, approved by the decree of 06 June 2019 (ALPE standard).

The ALPE standard is composed of three sections:

  1. Certification of Accounts
    The auditors adapt their mission according to the size of the audited company. They must reasonably ensure that the accounts are free of material misstatement and justify their assessments in the audit report.
  2. Report on Financial, Accounting and Management Risks
    It is a non-standardised, “valueadded” report for the executive with targeted recommendations on the entity’s specific risks. It may include an analysis of financial ratios/indicators, an assessment of internal controls and information systems, an assessment of cyber, fiscal and social risks, etc.
  3. Other Legal Due Diligences
    The auditors are exempt from performing all due diligence requirements and reports, in particular the report on regulated agreements, the statement of the highest paid persons, etc.

The professional board of French Auditors (CNCC) said they truly believed this would be more adapted to SMEs than a traditional audit. They also hoped that it could create further categories of missions for the whole profession.


Carole Hong Tran

Carole Hong Tran

GGI member firm
FIDAG SARL
Audit & Accounting, Tax, Advisory and Corporate Finance
Paris, France
T: +33 1 42 80 20 81
E: This email address is being protected from spambots. You need JavaScript enabled to view it.
W: www.fidag.com

FIDAG SARL was created in 1985 and specialises in accounting, auditing, and advice to SMEs where they are engaged in international operations, particularly tax issues, social and labour law, legal problems, accounting, and the management of operations taking place in at least two different countries.

Carole Hong Tran is an audit manager at FIDAG, French chartered accountant, and ACCA member, with considerable expertise in statutory audit and due diligence operations.
Dominique Le Roi

Dominique Le Roi

GGI member firm
FIDAG SARL
Audit & Accounting, Tax, Advisory and Corporate Finance
Paris, France
T: +33 1 42 80 20 81
E: This email address is being protected from spambots. You need JavaScript enabled to view it.
W: www.fidag.com

Dominique Le Roi is an Audit Senior at FIDAG and French Chartered Accountant, with considerable expertise in accounting and statutory audit. br />


Published: Auditing, Reporting & Compliance Newsletter, No. 03, Spring 2020 l Photo: TIMDAVIDCOLLECTION - stock.adobe.com

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