What is the role of a statutory auditor in an association?

The statutory auditor is a legal auditor, external to theassociation. He has several functions within an association, verifying the veracity and conformity of financial information with applicable law.

In this sense, he also exercises control over the decisions taken by the company's management. The auditor performs a statutory audit, and certifies the annual accounts for the tax authorities. His appointment is not always compulsory, and depends on a number of conditions.

Let's find out everything you need to know about the statutory auditor for associations.

When is the appointment of a statutory auditor mandatory for an association?

The appointment of a statutory auditor is not mandatory for an association.

It is required only if it meets at least one of the following criteria:

• It receives public subsidies in excess of €153,000 (with the exception of European subsidies).
• It has an economic activity and meets at least two of the following three criteria: it employs more than 50 people; its sales exceed 3.1 million euros excluding tax; its balance sheet total exceeds 1.55 million euros.
• It pays between 1 and 3 executives more than 200,000 euros a year
• It receives public subsidies in excess of €153,000 (with the exception of European subsidies) and is eligible for tax relief on donations to associations.

Otherwise, the appointment of a statutory auditor is optional.

What does an association's statutory auditor have to do?

A statutory auditor is responsible for certifying the association's annual tax package, comprising the balance sheetincome statement and notes to the financial statements. He is responsible for certifying them, to ensure that management decisions comply with accounting standards and the law.

It also guarantees the accuracy of the information provided in the association's financial and asset documents. This reassures members, employees, volunteers, contributors, sponsors and public authorities that the association is being properly managed.

Once his inspection is complete, the statutory auditor issues a report summarizing his findings. The deadline for providing the report is specified in the association's articles of association.

Finally, it also acts as an advisor to the association's management on best practices for day-to-day management, or to correct certain errors that may have been made during the previous financial year.

How is a statutory auditor's mandate defined?

All French statutory auditors are registered with the Ordre des Commissaires aux Comptes. Any professional who is not registered with this Order is not authorized to practice as a statutory auditor.

An auditor is appointed at the Annual General Meeting. The proposal for an auditor is put to a vote by the members present at the Annual General Meeting. To be approved, he or she must obtain the majority indicated in the Articles of Association.

Its term of office is generally 6 years.

In the first year, the statutory auditor draws up an engagement letter defining the nature and scope of his work, an estimate of the number of hours he will work, and the fees he will charge. This engagement letter serves as a contract between the association and the statutory auditor.

It may also be a good idea to select the best service provider according to whether he or she already has experience in the association sector, or even in your association's field of activity (sports, arts, culture, charity, etc.). This is how you will judge his or her ability to best carry out the missions you entrust to him or her.

Smaller associations are more likely to pay close attention to the fees they charge. Larger associations are in a position to put out a call for tenders for several auditors.