Chartered Accountant And Auditor: Who Does What?
In an increasingly open and responsive world our economies are demanding the most reliable and transparent accounting and financial information. Two independent and complementary professions contribute to it: the Chartered Accountant and the auditor. The difference between these two professions often seems obscure. Here is a beginning of clarification:
He organizes and follows the day-to-day business accounts, writes the VAT returns periodically. It is also part of its mission: in social matters, the publication of pay slips, the establishment of contribution slips for various organizations such as AHW, pension and provident funds. Its mission can be extended to the legal aspect through the drafting of employment contracts or the organization of elections of staff representatives.
Finally, each year the Chartered Accountant stops the accounts and establishes together with the manager, the balance sheet of the company. By signing, the Chartered Accountant certifies that he has not noticed anything that calls into question the accounts of the entity (negative insurance certificate).
At the same time, the Chartered Accountant will be able to accept specific assignments concerning the management of the company. Thus, he advises the entrepreneur on external growth opportunities, participates in the preparation of the business plan of an investment project.
The auditor has a function of general interest of security. This professional leads the manager to question the risks, their nature and the procedures to put in place. The opinions or recommendations that the auditor is required to give must remain in relation with his mission as defined by law and may not lead him to derogate from the rules of independence and especially non-interference in management.
The auditor brings security through the legal audit, source of confidence, by verifying and certifying the accounts published by the companies. He will have to make sure that the accounts give an image faithful to the results of the operations of the exercise as well as to the financial situation and the patrimony of the company.
At the end of the mission, the auditor analyzes and summarizes its audit work in order to justify his opinion. In his report on the annual accounts, the auditor may certify the accounts (positive insurance certificate) but may eventually issue reservations or even refuse their certification. Moreover, he must reveal to the Public Prosecutor any delict discovered during his mission.
Is The Appointment Of An Auditor An Obligatory One?
In a limited liability company this is optional as long as 2 of the 3 following criteria are not exceeded: 1.55 M € total balance sheet; € 3.1 million in revenue excluding taxes; 50 employees. An association receiving public subsidies above € 153,000 must have its accounts certified by an auditor. However, this varies from country to country.
Since 1 January 2009, the obligation to appoint an auditor in SAS is only required if one of the following conditions is fulfilled:
- At year-end 2, the SAS exceeds the following thresholds: balance sheet total greater than € 1 million, turnover exceeding € 2 million and / or the average number of permanent employees employed during the year. exercise exceeding 20 employees;
- The SAS controls or is controlled by one or more companies;
- One or more partners representing at least one-tenth of the capital apply in summary to the president of the commercial court the appointment of an auditor.
These two professions, each governed by an Order and its own ethical rules, ensure the quality of the accounts and the risk assessment and also contribute to the prosperity and sustainability of the business.