Alain Mikol

Regulation of the statutory auditor in the European Union: a comparative survey of the United Kingdom, France and Germany

In this paper we discuss regulation of the statutory auditor in the United Kingdom, France and Germany. Previous research has addressed regulation of statutory auditors with respect to regulatory harmonization and the reduction of barriers to intra-European trade in professional services. While these are important goals, it has also been the policy of the European Commission to encourage high standards of auditing, which the Commission anticipates will evolve within the legal and regulatory frameworks of the Member States of the EU. In this regard, our paper seeks to investigate how auditor regulation is organized in three important EU economies. In particular we examine several key functions of auditor regulation and how these are deployed in the three countries investigated. In addition we provide some forward-looking comments concerning regulation of statutory auditors in the EU.

Audit independence and nonaudit services: a comparative study in differing British and French perspectives

This paper presents a comparative study of respective positions of the British and French public accounting professions on whether independence of the statutory auditor is at material risk of compromise from supply of nonaudit services by audit firms to audit clients. For the purpose of the study, attention was confined to regulatory texts and professional audit standards in both countries. It examines historical factors in the development of public accounting and auditing in Britain and France that have led to an accommodating attitude towards joint supply of audit and nonaudit services in the former and a less accommodating and more highly regulated stance in the latter. As a basis for interpreting the significance of these different national positions, the issue of joint supply is considered in an agency theory framework, in terms of relative advantages and disadvantages from joint supply of audit and nonaudit services to audit firms, management in place and external parties, notably shareholders. In practice, the issue turns largely on professional and regulatory specification of audit firm activities deemed incompatible with audit independence and on regulatory mechanisms for monitoring compliance in the matter. Although the French position is less accommodating, it is noted that major firms in France have adopted legal and organizational structures to deal with regulatory constraints and to protect their functioning as multi-service firms. At the same time, French regulatory authorities have hesitated to impose strong constraints on major firms, with the result that actual operation of the French audit market may not be as different from the British as it might at first appear.

Internationalizing the French Auditing Profession

The objective of this paper is to trace the development of the French auditing profession, the commissaires aux comptes, focusing on the appearance of the large Anglo-American audit firms on the French market. The French audit market has always shown a number of peculiarities, including the continued importance of a number of local audit firms. The French auditing profession finds its roots in late 19th century company law that introduced an obligation for companies to release audited financial statements. The profession became regulated in its modern form in the 1960s. This paper attempts to explain the growing impact of the international audit firms on the French auditing profession. It also demonstrates how local professionals and the French state reacted to these developments.

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En ces temps de chasse aux couts, les entreprises disposent contre la fraude de procedures de controle efficaces. Encore faut-il les appliquer correctement.