FRANCE Law and Practice Contributed by: Jean-Christophe Devouge and Kaïs Boussadia, Aurès
7.2 Requirements for Directors Concerning Management Risk and Internal Controls Besides the duty of diligence a director must respect, listed companies are required to describe their internal control and risk manage - ment procedures in their annual report. They are also legally required to set up an audit commit - tee composed of board members, which must at least include one independent member with specific expertise in financial or accounting mat - ters. The audit committee is responsible for monitor - ing the effectiveness of the internal control and risk management systems and of the internal audit of procedures relating to the preparation and processing of financial and non-financial accounting information. In addition, the audit committee regularly meets with the heads of internal audit and risk control and gives an opinion on the organisation of their departments.
thresholds (these thresholds have been modified by Decree – 28 February 2024 – transposing a delegated Directive of 17 October 2023) as fol - lows:
• a balance sheet total of EUR5 million; • net turnover of EUR10 million; and • 50 employees.
Auditors are subject to certain requirements regarding their independence, which prohibit them from having any personal, financial or pro - fessional relationships that are incompatible with the functions of an auditor. In addition, any commercial activity or paid employment of the auditor for the benefit of the company whose accounts they audit is prohib - ited in order to preserve the auditor’s independ - ence.
277 CHAMBERS.COM
Powered by FlippingBook