Subsection 2: Certification of accounts

The professional practice standard relating to events subsequent to the end of the financial year, approved by the Minister of Justice, is shown below:

NEP-560 Events after the end of the financial year

Introduction

01. Between the balance sheet date and the date of approval of the financial statements, the statutory auditor may identify events that require accounting treatment or disclosure to the body called upon to approve the financial statements. These events are referred to as "subsequent events". 02. The applicable accounting standards define the subsequent events that must be subject to accounting treatment.

These are the events that occurred between the balance sheet date and the balance sheet date. These are events occurring between the balance sheet date and the accounts closing date:

-which are directly related to situations that existed on the balance sheet date and must be recorded in the accounts;

-or which must be disclosed in the notes to the financial statements.

After the balance sheet date, no accounting treatment is provided for subsequent events.

03. Subsequent events that must be disclosed to the body called upon to approve the financial statements are material events that the body must be aware of in order to make an informed decision on the financial statements.

When such events occur between the end of the financial year and the date on which the accounts are closed, they are mentioned in the report of the competent body to the body called upon to approve the accounts. When they occur after this date, they are reported to the body called upon to approve the accounts.

04. The purpose of this standard is to define:

-the audit procedures that the statutory auditor performs to identify subsequent events;

-the impact of subsequent events identified by the statutory auditor on its report or on the information provided to the competent bodies.

These implications differ depending on the date on which the auditor identifies subsequent events and the date on which these events occur.

Identification of subsequent events

05. The statutory auditor collects sufficient and appropriate information to enable it to identify subsequent events.

06. In order to do this, the statutory auditor may in particular:

-review the procedures put in place by management to identify these events;

-consult the minutes or reports of meetings held by the governing body and by the bodies referred to in article L. 823-16 of the French Commercial Code after the financial year-end;

examine, where appropriate, the most recent interim financial statements and forecasts drawn up by the entity;

- make enquiries of the persons responsible for the entity's management, including its directors, officers and employees enquire of the relevant persons at the entity as to the progress of legal proceedings, disputes and litigation since its last audits;

- enquire of the entity's management as to the progress of its legal proceedings, disputes and litigation since its last audits -enquiring of management as to its knowledge of the occurrence of subsequent events;

07. These procedures are carried out up to a date as close as possible to the date on which the statutory auditor signs his report.

Impact of subsequent events identified by the statutory auditor between the financial year-end date and the accounts closing date

08. Where the statutory auditor identifies a subsequent event between the balance sheet date and the accounts closing date that is likely to lead to a material misstatement of the accounts, he shall verify that this event has given rise to an appropriate accounting treatment.

If this is not the case, the statutory auditor shall verify that the subsequent event has given rise to a material misstatement of the accounts. If this is not the case, he informs management and asks them to amend the accounts.

09. If management refuses, the auditor assesses the impact on his opinion.

>. 10. Where the event has no impact on the financial statements but requires information to be provided in the report of the competent body of the entity to the body called upon to approve the financial statements, the statutory auditor verifies that this information has been provided.

If this is not the case, the statutory auditor verifies that the information has been provided. If this is not the case, he informs management and asks it to provide the required information.

11. If management refuses, the statutory auditor shall make an observation in his report.

Impact of subsequent events identified by the auditor between the date on which the accounts were closed and the date on which the auditor's report was signed

12. Where the statutory auditor identifies a subsequent event that occurred between the date on which the accounts were closed and the date on which his report was signed, he shall verify that this event has given rise to appropriate accounting treatment or to information in the report of the competent body to the body called upon to approve the accounts.

13. If this is not the case, and if the entity does not voluntarily re-approve the accounts, or if the report of the competent body to the body called upon to approve the accounts is not supplemented, the statutory auditor shall assess the impact on his opinion or make an observation in his report.

>. 14. Where the statutory auditor identifies a subsequent event that occurred between the date on which the accounts were closed and the date on which his report was signed, he shall enquire of the competent body whether it intends to communicate information on this event to the body called upon to approve the accounts.

Where such communication is not made within a reasonable period of time, the statutory auditor shall inform the competent body of his intention to communicate information on this event to the body called upon to approve the accounts. Where no such communication is provided for, the statutory auditor shall mention it in his report.

Impact of subsequent events known to the auditor between the date of signature of his report and the date of approval of the accounts

>. 15. After the date of signature of the auditor's report, the auditor no longer performs audit procedures to identify subsequent events.

16. When the statutory auditor becomes aware, between the date of signature of his report and the date of approval of the financial statements, of a subsequent event occurring between the financial year-end date and the date of approval of the financial statements, he shall verify that this event has given rise to an appropriate accounting treatment or to information in the report of the competent body to the body called upon to approve the financial statements.

17. If this is not the case, and if the entity does not voluntarily re-approve the accounts, or if the report of the competent body to the body called upon to approve the accounts is not completed, the statutory auditor shall assess the impact on his opinion or on the part of his report relating to the audit of:

-the management report, other documents relating to the financial position and financial statements and information relating to the corporate governance report addressed to the members of the body called upon to approve the financial statements; or

-the information relating to the Group given in the management report,

and draws up a new report in which reference is made to the previous report.

18. When the statutory auditor becomes aware, between the date on which his report is signed and the date on which the accounts are approved, of a subsequent event occurring after the date on which the accounts are closed, he shall enquire of the competent body whether it intends to communicate information about this event to the body called upon to decide on the accounts.

Where no such communication is provided for, the statutory auditor drafts a communication which is read out at the meeting of the body called upon to approve the accounts or which is brought to its attention.