Understanding the differences in audit requirements is essential for any multinational business seeking compliance, transparency, and investor confidence.
In this blog we compare the auditing requirements in Australia and France.
Regulatory Bodies and Audit Frameworks
Both France and Australia have well-established regulatory systems that ensure the integrity and transparency of financial reporting.
Auditing in France
In France, the audit profession is regulated by the Haut Conseil du Commissariat aux Comptes (H3C), which ensures the quality and independence of auditors. Audits are performed in accordance with the Normes d’Exercice Professionnel (NEP), developed under the authority of the H3C.
As France operates under a civil law system, audit obligations and professional standards are clearly defined and codified in legislation.
Auditing in Australia
In Australia, the Australian Securities and Investments Commission (ASIC) oversees the audit profession and enforces compliance with national auditing requirements. Auditors follow the Australian Auditing Standards (ASAs), which are based on the International Standards on Auditing (ISA).
Unlike France, Australia applies a common law system, placing greater emphasis on principles, professional judgment, and sound corporate governance practices.
Despite these differences, both frameworks aim to promote transparency, reliability, and trust in financial information.
Auditing Process
In both France and Australia, the purpose of auditing is the same: to verify the accuracy of financial statements, ensure transparency, and strengthen confidence in a company’s financial reporting.
This means that auditors in both countries focus on confirming that the financial statements present a true and fair view of the company’s financial position in accordance with the respective national auditing standards. Throughout the audit process, they are also required to remain fully independent and objective to maintain the integrity of their opinion.
Both jurisdictions also require auditors to report any irregularities they identify during their work, although the approach differs.
In France, auditors have a formal procédure d’alerte (alert procedure), which obliges them to inform the company’s management and, if necessary, the commercial court when they detect irregularities that could threaten the company’s going concern.
In contrast, Australia does not have a structured alert mechanism; however, auditors are legally required to report significant breaches or suspected misconduct to the Australian Securities and Investments Commission (ASIC).
Additionally, French auditors play a broader role beyond the annual audit of financial statements. They may be appointed to perform specific assignments such as verifying the value of contributions during mergers, transformations, or capital increases.
Statutory Auditing Requirement Thresholds
Criteria |
France |
Australia |
|---|---|---|
Audit Requirement Trigger
|
Mandatory if company exceeds 2 of 3 thresholds: • Balance sheet total: €5 million • Turnover (excl. VAT): €10 million • Employees: >50 |
Proprietary company considered “large” if it meets 2 of 3 thresholds: • Revenue: ≥ AUD 50 million • Gross assets: ≥ AUD 25 million • Employees: ≥100 |
Audit Obligation
|
Large and medium-sized companies must appoint a statutory auditor (commissaire aux comptes).
|
Large proprietary and all public companies must prepare audited financial reports. Small proprietary companies only if directed by ASIC or shareholders.
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Lower Thresholds for Subsidiaries
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Applies when controlled by an entity already audited: • Balance sheet: €2.5 million • Turnover: €5 million • Employees: >25 |
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Other Entities that need to conduct an Audit
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Non Profits are required if annual donations + subsidies exceed €153,000 or if recognized as public utility, issue bonds, or provide microloans.
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Companies limited by guarantee: • Revenue < AUD 1 million → audit or review • Revenue ≥ AUD 1 million → audit mandatory |
Public Companies
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All public limited companies (Société Anonyme – SA) require audits regardless of size.
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All public companies must prepare audited reports and lodge them with ASIC. Relief available for certain wholly owned subsidiaries (via ASIC Instrument 2016/785).
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Filing / Submission Timeline
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Financial statements filed annually with the Greffe du Tribunal de Commerce.
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Reports must be audited and lodged within 4 months after financial year-end (public companies).
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You can read more about audit requirements in France on our dedicated blog post.
Auditor Appointment
Appointment of an Auditor in France
In France, a statutory auditor (commissaire aux comptes) can be appointed either directly in the company’s founding documents (statuts) or later by a resolution passed at a general shareholders’ meeting.
If an auditor has not been appointed or a vacancy arises due to resignation or dispute, the commercial court may designate one to ensure compliance with audit obligations.
Compliance with the audit law in France requires companies to appoint both a principal (titular) auditor and an alternate auditor, who steps in if the primary auditor is unable to perform their duties.
Auditors must be selected from the official registry maintained by the Haut Conseil du Commissariat aux Comptes (H3C).
Rotation rules:
Public Interest Entities (PIEs) are required to change their audit firms every 10 years. This rotation period can be extended up to 24 years if the audit firm is appointed through a competitive tender process, ensuring that companies periodically reassess and select their auditors transparently.
For companies that are not classified as PIEs, auditors are typically appointed for a term of 6 years, but there is no strict requirement for mandatory rotation.
You can read more about mandatory rotation of auditors in France here.
Appointment of an Auditor in Australia
In Australia, an auditor may be an individual registered company auditor, a firm, or an authorised audit company.
The directors of a public company must appoint an auditor within one month of registration, unless one has already been appointed at the general meeting. This appointment is then confirmed or replaced at the company’s first Annual General Meeting (AGM).
For proprietary companies, the directors may appoint an auditor if one has not already been appointed by the members.
Auditors remain in office until they resign with ASIC’s consent, are removed under Section 329, become ineligible, or the company is wound up. Moreover, a statutory auditor is extremely hard to get removed in Australia. The management needs to take permission of the central government after its board of directors recommends a proposal to this effect.
However, this does not mean that auditors never change!
Rotation Rule:
In Australia, any auditor playing a significant role must be rotated after 5 successive financial years in the role, followed by a cooling-off period of 5 years for EP and 3 years for EQCR before they can resume.
Penalties
In the event of non compliance with audit laws, the following penalties may apply.
Penalties in France
In France, if the auditor finds errors, then tax reassessments and penalties may apply.
Penalties may include:
- 0.4% monthly interest on unpaid taxes
- 10% fines for errors made in good faith
- Up to 200% penalties in cases of fraud or willful misconduct
Appeals are possible but are rare, costly, and usually unsuccessful.
Penalties in Australia
In contrast, in Australia, if the auditor identifies errors in the company’s financial statements, the Australian Taxation Office (ATO) may reassess taxes and impose penalties. Penalties may include:
- General Interest Charge (GIC) on unpaid taxes, calculated daily and compounded.
- Penalties up to 75% of the underpaid tax if false or misleading statements are made recklessly and lead to shortfall. You can find the exact penalty rates here.
- In case of false or misleading statements that do not lead to a shortfall, generally, there will be no penalty. However, in some cases you may be charged based on this penalty table.
Appeals are possible through the ATO’s review and objection process, including requests for remission of interest or penalties. However, appeals can be complex, time-consuming, and may require legal assistance.
Audit requirements in Australia and France share the common goal of ensuring financial transparency and integrity, but they differ significantly in structure, legal framework, and regulatory enforcement.
Australian auditing emphasizes principles, professional judgment, and adherence to international standards, while French audits are closely codified in law with broader statutory obligations for corporate transactions.
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