Raises criminal and disciplinary sanctions

Environment

Two legal auditors work together to run an accounting and legal auditing firm. Since 2006, one of them has assumed responsibilities within professional accounting firms, handing over the second to the management and financial management of their companies. In 2014, the latter was fired as his co-manager by a general meeting of partners of one of the companies due to serious discrepancies mentioned in the accounts. The first partner complained to the second about the fraud that caused harm to the companies.

In 2017, a criminal court convicted a second accomplice of misappropriating corporate property and breach of trust and sentenced him to 6 months suspended imprisonment and ordered the confiscation of the building he owned. Thereafter, the Duai Court of Appeals upheld the seizure of the property, suspended the one-year sentence, and imposed an additional sentence, barring the auditor from practicing. For a period of 3 years.

The problem

Can an auditor subject to criminal penalties be subject to disciplinary sanctions for the same acts?

Solutions

The application of sanctions due to the auditor’s immoral conduct is provided in Article L. 824-1 of the Trade Code, in particular which, in contrast to any serious negligence or disrespect and decency, may, in fact, defame the auditor. The latter is subject to criminal penalties for misappropriation of corporate assets and breach of trust.

To determine the sanction to be imposed, the article l. 824-12 specifies 7 criteria to be taken into account. We see the particular intensity, the quality and especially the quantity of the ingredient.With regard to H3C, financial fraud for personal purposes is a particularly serious actThe importance of the amount should also be taken into account (378,000), as well as the duration of the facts (4 years) and the status of the legal auditors.

Finally, it was settled by lawsuit The principle of necessity for crimes and punishments does not preclude the same acts committed by the same person from different cases For purposes of restrictions of a different nature in the use of separate terms, the total amount of restrictions imposed shall not exceed the maximum amount of one of the restrictions imposed (CE n 383514, 27 January 2016).

Decision

The High Council of Legal Auditors announces the removal of the expert from the list of statutory auditors (H3C, 16 July 2021, file n 2020-05 S).