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Session 2 - How to become an auditor? - Coggle Diagram
Session 2 - How to become an auditor?
Roles in an organization
Employee(s)
Internal audit
3rd parties
External (financial) audit
Other professionals in finance,
accounting and taxes (including
certified accountant)
Similar skills for both roles
Hard skills
Knowledge of finance and accounting
Understanding & use of IT tools
Business acumen
Soft skills
Integrity, objectivity
Curiosity
Communication
Empathy
Organizational skills
Being methodical
Capacity for analysing and synthetising complex information
Diplomacy, tact
Audit professions in France
CPA
(Comptable Professionnel Agréé)
Independent profession regulated
by the EU
Conducts legal financial audit
missions and other legal missions
Uses CNCC Standards of
Professional Practice (NEP)
or ISAs
Reports to the
Audit Committee
Statutory audit
NEP (in France)
Contractual audit
International reference: ISA standards
Internal auditor
Employee, reports to the company’s management
Compliance or operational audit assignments
Reports to
General Management
&
Audit Committee
Uses
IIA
standards
(Institute of Internal Auditors)
Career in external auditing
CPA France (Commissaire aux comptes)
Key figures in France
12 000 prof in 2020 (22% women)
59% work alone/in one-person structures
95% of statutory auditors = chartered accountants, registered with the 2 prof bodies (CNCC & OEC)
Becoming a statutory auditor in France
Chartered Accountant Degree + 2 years of work experience w/ statutory auditor
No criminal or disciplinary conviction + Absence of personal bankruptcy or forfeiture
Statutory Auditor Degree + 3 years of work experience w/ statutory auditor
“Certified accountant degree”
= main degree for the profession in France
Career in internal auditing
Classic paths
Big Four experience for 2 to 5 years
Business school graduate w/internships in internal (or external) audit
Required skills
Behavioral skills
Capacity for analysis/critical thinking
Communication
Technical skills
Organization
Team Management
Accounting
Assessing efficiency of risk management
IT systems
Data extraction and analysis
Technical skills
Accounting, finance
Industry specific knowledge
Foreign languages
Master 2, including
many Grandes Ecoles
Professional auditing standards
Prof financial AS
Objectives
=
Increase the level of confidence of users of financial info
Reduce info asymmetry between insiders/outsiders
Express an opinion on the compliance of the fin. stat. with an accounting stand framework (IFRS, other GAAPs)
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Principle of reasonable assurance
ISA
(International Standards on Auditing)
standards are applicable:
at the international level for audits of consolidated financial statements
in France for contractual audits of financial statements
Issued by the International
Auditing and Assurance Standards Board
(IAASB)
NEP in France
(Normes d'exercice professionnel)
Statutory audit
Prof internal audit AS
International Standards for the Professional Practice of Internal Auditing
Define the basic principles that IA practice should follow
Establish criteria for evaluating the functioning of internal audit
Promote continuous improvement of organizational processes & operations
Internal audit
Compliance or Operational audit
International Framework
: IIA International Standards for the Professional Practice of Internal Auditing
Professional organizations linked to the audit professions
International professional audit organizations
Internal Auditor
IIA; ECIIA; UFAI
CPA
IFAC; IAASB; AICPA
French professional audit organizations
CPA
CNCC; H3C; Ordres des experts compatibles
Internal Auditor
IFACI
Automation of financial audit
Technological innovation in audit software (ex: IDEA or Teammate)
FEC
(Fichier des écritures comptables)
legal requirements
Consequences
Internal reorganization of audit firms, tools and methodology
New skills required in data analytics
Need for increased training for the current audit teams
PACTE Law
(in France)
Objective
= Simplification of the creation and management of companies; applicable from January 1st 2020.
Key measure
= increase in the mandatory statutory auditor appointment thresholds (depending on legal form of the companies)v
Consequences
: Reduction in the number of companies audited (-153,000 audited companies) and drop in activity in auditor firms (-25% overall)
Reorganization of the sector
with the development of new assignments with high added value (see CNCC publication)
2 projects launched by the CNCC
: Mission ALPE (Voluntary Statutory Audit of Small Businesses) + New offers of contractual missions (CSR, Cybersecurity, etc.)