In France, the appointment of a statutory auditor (CAC) is not just a simple accounting formality: it is a genuine legal obligation that applies to certain commercial companies or associations as soon as specific financial thresholds are crossed. At the end of a financial year, if the balance sheet total, sales excluding tax or average number of employees exceeds the criteria set out in the French Commercial Code, thecompany is obliged to appoint a statutory auditor. The role of the statutory auditor is to certify the accounts, verify the regularity and fairness of the financial statements, and ensure the reliability of legal and financial information.
The obligation to appoint an auditor applies equally to SASs, SARLs, EURLs and SAs, as well as to certain associations that receive public funding or exceed a certain threshold of resources. The stakes are high: failure to comply can result in civil, commercial and criminal penalties for the company and its directors.
Goldwin Avocats, experts in company law in Paris, has a long history of helping companies to anticipate the rules, secure the appointment of the statutory auditor and avoid any legal risks. We tell you more.
What is a statutory auditor (CAC)?
Main tasks and obligations of a CAC
The statutory auditor (CAC ) is an independent professional subject to the Code of Ethics. Hisstatutory audit mission consists of exercising a legal control over the fairness of accounting documents. His main tasks are :
- To certify the annual and consolidated accounts to ensure that they are true and fair.
- Verify that they are in order and comply with the regulations in force.
- Draw up an annual report for shareholders, investors, the tax authorities and the courts, if requested.
- Report any anomalies or fraud detected to the court.
- Contribute to asset protection, financial transparency and compliance with the principles established by decree.
Differences between a statutory auditor and a certified public accountant
- Thechartered accountant keeps the accounts, prepares tax documents and advises the company or individual on management, project creation or share capital.
- The auditor intervenes after the fact: he checks, verifies and gives an objective opinion on the reality of the figures. Their role is to guarantee transparency in relation to third parties (banks, shareholders, the State) and to reinforce confidence in the decisions made at the general meeting.
When must an auditor be appointed?
The appointment of a statutory auditor is a procedure strictly governed by the French Commercial Code. It becomes mandatory when a company crosses the new thresholds set by decree no. 2024-152 of 28 February 2024. These rules apply to all commercial companies, whatever their form or legal status.
A company must appoint a statutory auditor if, at the end of the financial year, it exceeds at least two of the following three criteria:
- a balance sheet total in excess of €5 million,
- annual sales excluding tax of more than €10 million,
- an average of 50 employees.
This obligation comes into force as from the following financial year. However, even below these thresholds, a company may be required to appoint a CAC if it belongs to a group and is a significant subsidiary. In this case, reduced thresholds apply: €4 million balance sheet, €2.5 million annual sales and 50 employees.
Companies, associations and entities concerned
The conditions for appointing a statutory auditor differ according to the legal status and nature of the entity.
- Public limited companies (SA and SE): since the PACTE law(Plan d’Action pour la Croissance et la Transformation des Entreprises) promulgated on 22 May 2019, which aims to simplify business life, the appointment of the statutory auditor is no longer automatic on creation. It only becomes compulsory if the company exceeds the new thresholds or acts as a parent company or significant subsidiary in a small group.
- SARL (Société à Responsabilité Limitée) and EURL (Entreprise Unipersonnelle à Responsabilité Limitée): the obligation exists as soon as the company crosses two of the three criteria (€5m balance sheet, €10m sales, 50 employees) at the year-end threshold. It is also required where a SARL heads a group or is controlled, even indirectly, by another company.
- SAS and SASU: same conditions as for SARLs and SAs. The CAC is appointed when the SAS exceeds the legal thresholds, or if it controls/is controlled by another company.
- Associations: these must appoint an auditor as soon as they receive more than €153,000 in public subsidies or donations qualifying for tax relief. Associations recognised as being in the public interest, those that issue bonds or grant loans for business start-ups are also concerned.
- Other entities (SNCs, SCSs, SCAs, SELs, cooperatives): the rules applicable to them depend on the legal status chosen and, in practice, follow those laid down for SARLs or SAs.
Why appoint a statutory auditor even if you don’t have to?
Even if they are not obliged to do so, some companies choose to appoint an auditor on a voluntary basis. This is a way of proving financial soundness, reliable bookkeeping and good governance. This reassures banks, investors, associates and business partners, while reinforcing the credibility of the financial statements.
Need help deciding whether to appoint a statutory auditor? Contact Goldwin Avocats, experts in business law.
How does the appointment of a statutory auditor work?
The appointment of a statutory auditor is a procedure governed by the French Commercial Code. It is more than a simple internal choice: it is governed by precise rules and involves several legal and administrative stages. Each company concerned must comply with this procedure if the appointment is to be valid and enforceable against third parties.
Appointment and renewal procedures
The appointment of a CAC is decided at an Ordinary General Meeting (AGM). The shareholders cast a collective vote, which is recorded in the minutes. This decision constitutes a legal document that must then be published and sent to the Commercial Court for registration in the Trade and Companies Register (RCS).
There are several stages in the process:
- Check whether thelegal obligation applies (thresholds exceeded, legal form, group situation).
- Put the appointment of the statutory auditor on the agenda for the AGM.
- Vote on the appointment and record it in the minutes.
- Carry out the legal formalities and file the decision with the court clerk’s office.
Term of office and renewal
The statutory auditor’s term of office is set at 6 consecutive financial years, in accordance with the French Commercial Code. At the end of the term, the shareholders may decide to reappoint the current auditor or to appoint a new auditor.
Renewal follows the same procedure as the initial appointment: inclusion on the agenda, vote at the meeting, filing with the Commercial Court and legal publicity.
Mandatory appointment of two statutory auditors
Some companies are required to appoint 2 statutory auditors:
- listed companies
- groups of companies exceeding consolidated thresholds set by decree.
In such cases, the procedure to be followed is for the General Meeting to appoint two CACs at the same time, in order to ensure enhanced control and consolidated certification of the accounts. This dual appointment helps to guarantee the financial transparency and reliability of the consolidated statements.
Penalties and consequences of non-appointment
Legal sanctions
When companies exceed the thresholds set by decree and fail to comply with the legal controls, the consequences can be severe. A fine of €30,000 may be imposed and, in the event of fraud, the representative may be imprisoned. In addition, any collective action taken at a meeting without independent control may be annulled, leading to the content of decisions being called into question and the strategic choices made being overturned.
Directors’ liability
Failure to appoint a director directly commits the natural person exercising the power of decision. It may have economic consequences for the company’s capital, the long-term viability of a project or the protection of business assets. In addition to the financial consequences,criminal law mayapply if the behaviour reveals deliberate concealment. In this case, the judge issues an opinion that may transform a breach into gross misconduct, with lasting sanctions for the designated person.
How much does a statutory auditor cost?
The cost of a statutory auditor is governed by an hourly scale defined by the French Commercial Code (article R823-12). Fees are therefore not set freely, but calculated on the basis of the estimated time required for the assignment and an hourly rate (generally between €100 and €200 excluding VAT).
The calculation is based on :
- the balance sheet total
- operating income
- financial income.
Based on this amount, a scale sets a range of hours:
- up to €305,000 → 20 to 35 hours,
- between €3m and €7.6m → 70 to 120 hours,
- over €45m → 300 to 700 hours.
The fees are therefore the result of: estimated hours × hourly rate.
They vary according to the size of the company, the number of employees, the complexity of the audit and regulatory requirements. A small limited liability company will pay much less than an audited company that exceeds the legal thresholds.
This scale ensures transparency, fairness and the prevention of disputes, reinforcing the confidence of third parties in the certification of annual accounts.
Conclusion: statutory auditors, a strategic issue for companies
The need to appoint a statutory auditor arises as soon as certain financial thresholds are crossed. Failure to comply with these rules exposes company directors to legal and financial penalties.
Beyond the legal framework, the presence of a statutory auditor is also a guarantee of financial reliability and credibility with partners, investors and public bodies.
Do you need to check whether your company is obliged to appoint a statutory auditor, or do you want to be sure that you are doing so?
Goldwin Avocats in Paris, experts in business law, will support you at every stage of the appointment process and defend your interests.
Frequently asked questions about statutory auditors
When should I change my statutory auditor?
A change of statutory auditor generally occurs at the end of the statutory 6-year term of office. The Ordinary General Meeting may then decide not to reappoint the outgoing statutory auditor and to proceed with a new appointment. However, other situations may justify early replacement: loss of confidence on the part of shareholders, disagreement over thestatutory audit method, restructuring of the company or merger with another entity. The procedure must comply with the French Commercial Code, and the Commercial Court may be called upon in the event of a dispute. In all cases, it is essential to ensure continuity in the certification of accounts, in order to guarantee the reliability of financial information for third parties.
Which articles of the Commercial Code specify that the statutory auditor is mandatory?
The main rules are set out in the French Commercial Code. More specifically, articles L.823-1 et seq. define the role of the statutory auditor, the conditions under which he or she is appointed and the applicable thresholds. These provisions are regularly amended by decree, in order to adapt the criteria to economic realities. For example, the decree of 3 May 2019 and the texts that came into force in January 2024 and February 2025 set the thresholds applicable to companies (balance sheet total, turnover, number of employees). The Code also sets out the legal consequences offailure to appoint a director: fines, nullity of collective decisions and liability of directors. It is therefore the main legal source for any company or association wishing to check whether it is obliged to appoint a CAC.
What is the difference between a deputy CAC and a full CAC?
A Statutory Auditor is the person who directly carries out the statutory audit and certifies the accounts. Alternate auditors, on the other hand, have no active role while the incumbent auditor is in office. The alternate auditor is only involved if the incumbent ceases to perform his duties before the expiry of the term of office (death, resignation, dismissal). Their presence ensures continuity of the audit without any immediate reappointment.
Can a CAC be dismissed by the shareholders?
Yes, a statutory auditor can be dismissed by the shareholders, but only for legitimate reasons (misconduct, incapacity, conflict of interest). Dismissal cannot be decided freely at a shareholders’ meeting: it must be validated by a judge, to avoid abuses. Without this judicial decision, the dismissal would be null and void.
What happens when a CAC is involved in the merger or demerger of a company?
During a merger or demerger, the statutory auditor intervenes to guarantee transparency and the protection of the shareholders. He checks the value of the contributions, the exchange parity of the shares and the sincerity of the information provided. His role is to give an objective opinion on the reality of the transaction and to alert the company to any anomalies. The auditor then draws up a reasoned report, which is submitted to the shareholders before they vote at the AGM, to inform their decision and provide legal certainty for the transaction.
What role does the CAC play in detecting accounting irregularities and preventing fraud?
The statutory auditor plays an essential role in detecting accounting irregularities and preventing fraud. He checks the consistency of entries, assesses internal control procedures and identifies areas of risk. In the event of serious irregularities, the auditor alerts the competent bodies, or even the courts. In certain situations, it may be necessary to call on the services of a lawyer specialising in company law to help the company meet its obligations, secure its procedures and limit the legal risks associated with the offences detected.
Can the same statutory auditor be appointed for several companies in the same group?
Yes, it is possible to appoint the same statutory auditor for several companies in a group, provided that the rules of the Code of Ethics are complied with and any conflicts of interest are avoided. This practice facilitates theconsolidated audit, improves the consistency of controls and reduces certain costs. However, the CAC must guarantee its independence and have the necessary resources to carry out its mission for all the entities concerned. In certain cases, the judge may require the appointment of two CACs in order to enhance transparency.
