How are French auditors dealing with new regulations: anti-money laundering and terrorist financing

Auditors must check the client identification before accepting an engagement. Depending on risk level and the auditors’ professional judgement, simplified, reinforced, or complementary due diligence measures are applied. During the mission, auditors remain vigilant when updating information, identifying clients and if applicable, beneficial owners. If the risk is too high, auditors should not accept or cease the mission unless services are related to court procedure and/or legal consulting.

New regulations emphasise diligences for beneficial owners and persons domiciled, registered, or established in a high-risk country included on the lists published by the Financial Action Task Force (FATF).

Declaration to TRACFIN

Auditors report to TRACFIN sums or transactions which they know, suspect, or have good reason to suspect, arise from offences punishable by a custodial sentence of more than one year, or derive from terrorist financing. In cases of tax fraud, a declaration should be made under certain conditions. Regulations specify the procedure and confidentiality of this declaration. If proof exists, any criminal actions are reported to the public prosecutor.

Auditor responsibilities

Auditors’ files must be kept for five years after engagement with the client to avoid liability in case of fraud disclosure. Since summer 2020, the CNCC, the French auditing professional body, requires auditors to complete a one-day training course on these new regulations.

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