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 New Zealand and France.
Regulatory Bodies and Audit Frameworks
Both France and New Zealand have well-established regulatory systems that ensure the integrity and transparency of financial reporting.
Company Audit 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.
Company Audit in New Zealand
In New Zealand, the Financial Markets Authority (FMA) oversees the audit profession and enforces compliance with national auditing requirements. Auditors follow the New Zealand Auditing and Assurance Standards (NZ ASAs), which are aligned with the International Standards on Auditing (ISA) and issued by the External Reporting Board (XRB).
Unlike France, New Zealand operates under a common law system, which places strong emphasis on principles-based regulation, professional judgement, and transparent corporate governance practices.
Despite these differences, both frameworks aim to promote transparency, reliability, and trust in financial information.
Auditing Process
In both France and New Zealand, 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 New Zealand, there is no structured alert procedure equivalent to France’s system. Instead, auditors must comply with statutory reporting obligations under the Financial Markets Conduct Act 2013 and related regulations. This includes reporting serious wrongdoing, breaches of financial reporting requirements, and concerns about auditor independence to the appropriate authorities such as the Financial Markets Authority (FMA) or, in some cases, the company’s shareholders.
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 Audit Requirements Thresholds
Criteria |
France |
New Zealand |
|---|---|---|
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 they meet (Companies Act 1993) meeting either of the following for the two preceding years: • Total assets ≥ NZD 66 million, or • Total revenue ≥ NZD 33 million, or • 1 or more large subsidiaries |
Audit Obligation
|
Large and medium-sized companies must appoint a statutory auditor (commissaire aux comptes).
|
• FMC reporting entities must have financial statements audited by a licensed auditor. • Large companies (NZ or overseas) must prepare audited financial statements. |
Lower Thresholds for Subsidiaries
|
Applies when controlled by an entity already audited: • Balance sheet: €2.5 million • Turnover: €5 million • Employees: >25 |
For overseas companies with subsidiary in New Zealand meeting either of the following for the two preceding years: • Total assets ≥ NZD 22 million, or • Total revenue ≥ NZD 11 million |
Other Entities that need to conduct an Audit
|
Non Profits are required if annual donations + subsidies exceed €153,000 or if recognized as public utility, issue bonds, or provide microloans.
|
• Charities that spend over NZ$1.88 million for two years in a row must get a full audit from a qualified auditor. • If your charity spends between NZ$938,085.65 and NZ$1.88 million, you can pick either an audit or a review. • Non Profits must conduct an audit if they have annual operating expenses of NZD $500,000 or more or if they receive government funding of NZD $10,000 or more. |
Public Companies
|
All public limited companies (Société Anonyme – SA) require audits regardless of size.
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All listed companies need to prepare financial reports.
|
Filing / Submission Timeline
|
Financial statements filed annually with the Greffe du Tribunal de Commerce.
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Financial statements must be filed or lodged no later than: • 4 months from the balance date for FMC reporting entities, and • 5 months from the balance date for large companies. |
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 New Zealand
In New Zealand, an auditor may be a licensed auditor, an audit firm, or a registered audit firm approved under the Auditor Regulation Act 2011.
For companies required to be audited, the board of directors is responsible for appointing the auditor unless the constitution or shareholders specify otherwise. Publicly accountable entities and FMC reporting entities must appoint an auditor who is licensed and registered for FMC audits.
If an auditor has not been appointed by the directors before the Annual Meeting of Shareholders, the shareholders may appoint the auditor at that meeting.
Auditors remain in office until they resign, are removed by shareholders, become ineligible, or the company is liquidated.
However, this does not mean that auditors never change!
Rotation Rule:
In New Zealand, 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 New Zealand
In contrast, in New Zealand, if an auditor identifies errors in a company’s financial statements that affect tax reporting, the Inland Revenue Department (IRD) may reassess the company’s tax position and impose penalties.
Penalties may include:
- Use-of-Money Interest (UOMI) on underpaid tax, calculated daily.
- Shortfall penalties ranging from 20% to 150%, depending on the severity of the behaviour (e.g., lack of reasonable care, gross carelessness, abusive tax position, or evasion).
Audit requirements in New Zealand and France share the common goal of ensuring financial transparency and integrity, but they differ significantly in structure, legal framework, and regulatory enforcement.
Audit in New Zealand 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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