In brief: A financial audit in Morocco is an independent examination of a company’s financial statements by a chartered accountant registered with the OEC. It is mandatory for all public limited companies (SA) and for companies exceeding MAD 50 million in turnover.
A financial audit is an examination carried out by an independent professional to certify an entity’s accounts. At the end of the audit, the auditor expresses an opinion on whether the accounts give a true and fair view of the company’s financial position.
In Morocco, financial auditing is the exclusive domain of chartered accountants. A chartered accountant registered with the OEC is the only professional authorized to express an audit opinion.
Definition of the Audit Engagement
The audit engagement of financial statements allows the auditor to express an opinion. In that opinion, the auditor states whether the financial statements have:
- First, been prepared in all material respects in accordance with an identified accounting framework;
- Second, that they present a true and fair view of the company’s financial position, as well as the results of its operations and its cash flows.
The auditor must carry out the engagement in compliance with the professional standards established by the Institute of Chartered Accountants (OEC). These standards, set out in the audit standards manual, cover the various aspects and stages of the engagement.
These standards ensure uniformity in auditors’ working methodology and guarantee the quality of audit work.
The auditor gathers sufficient appropriate evidence to draw the conclusions on which the opinion is based.
The audit opinion provides a high (but not absolute) level of assurance that the accounts are accurate, honest, and give a true and fair view of the company’s financial position.
In the report, the auditor expresses an audit opinion on the accounts presented. This opinion may be:
- First, an unqualified opinion on the financial statements;
- Second, a qualified opinion on the financial statements; the report must clearly state these qualifications;
- Finally, a disclaimer of opinion.
Statutory Audit and Contractual Audit
A statutory audit is a mandatory engagement required by law. In Morocco, the law makes auditing mandatory in the following cases:
- First, for all public limited companies (SA) regardless of their size;
- Second, for any form of company (particularly LLCs) when turnover exceeds 50 million dirhams.
In a contractual audit, the auditor’s engagement is limited to expressing an opinion on the accounts.
By contrast, in a statutory audit (also known as a statutory audit engagement), the auditor performs additional verifications. The statutory auditor is responsible, in particular, for:
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First, ensuring equality among shareholders;
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Second, preparing a special report on regulated agreements;
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Third, issuing specific certifications and approvals;
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Fourth, giving an opinion on operations defined by law, including:
Removal of pre-emptive subscription rights during a capital increase;
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Issuance of convertible bond loans;
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Creation of priority dividend shares.
Furthermore, the statutory auditor is responsible for:
- Convening the general meeting in the event of management body default;
- Verifying the information provided in the management report.
- Generally, reporting any breach of legal and regulatory requirements.
OUR SERVICES
Consolidated Accounts: Assistance and Audit Statutory Audit & Independent Audit Due Diligence
Auditor Qualifications
The Institute of Chartered Accountants (OEC) standards require the following qualities from the auditor:
First, Competence:
The competence of a chartered accountant to carry out an audit engagement is legally presumed.
Indeed, OEC members are subject to strict training and professional experience requirements upon registration.
Therefore, membership in the Institute of Chartered Accountants is a legal requirement for carrying out an audit engagement.
Indeed, membership in this professional body guarantees the quality of the audit engagement. The OEC is responsible for:
- First, implementing work and reporting standards;
- Second, conducting quality controls. Indeed, each auditor must maintain a working file that may be reviewed at any time by the Institute;
- Third, ensuring compliance with ethical and professional conduct rules;
- Finally, providing a guarantee that the engagement is carried out with professionalism and responsibility.
Second, Independence
The auditor’s role is not to interfere in the company’s management. On the contrary, the auditor must ensure compliance with incompatibility rules that could compromise objectivity.
For example, the auditor cannot certify accounts that they have prepared themselves (or assisted in preparing). The accounts to be certified remain the sole responsibility of the company’s management bodies.
Similarly, in a public limited company, the auditor must examine the accounts after they have been approved by the Board of Directors.
The auditor’s responsibility is to express an opinion based on the audit of these accounts.
Certification, Accuracy, and Fairness of Accounts
Certification involves issuing a reasoned opinion by a competent and independent professional: the auditor.
During the engagement, the auditor must assess:
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First, the compliance of the accounts with applicable accounting rules and laws; for example, in Morocco, accounts must be prepared in compliance with the CGNC. The auditor states whether the accounting principles and standards have been followed in preparing the accounts;
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Second, the fairness of the information contained therein;
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Finally, the true and fair view given by the financial statements. Indeed, the accounts must give a true and fair view of:
the company’s operations;
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its results;
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its financial position.
The true and fair view must be understood for the financial statements taken as a whole. It also draws on the principle of materiality. Thus, the auditor must report in the audit report any error or situation likely to significantly call into question this true and fair view.
The auditor’s personal judgment is an essential component of the process.
Obligation of Means in an Audit Engagement
The auditor must implement the necessary procedures to draw conclusions. Indeed, the auditor must carry out all appropriate verifications to support the opinion.
However, this obligation is an obligation of means, as confirmed by Article 169 of the Public Limited Company Act.
The auditor fulfills this obligation of means by implementing all the professional standards set out in the audit standards manual.
Auditing standards in Morocco comply with international practices, particularly ISA standards.
In addition, the auditor (or statutory auditor) must surround themselves with competent staff. If necessary, they may call upon the services of qualified external experts.
In the event of non-compliance with standards, the auditor incurs disciplinary, civil, and sometimes even criminal liability. This is particularly the case when negligence or a breach of duties or ethics is established.
When the auditor cannot perform the procedures required by the standards, a disclaimer of opinion must be expressed in the report.
Frequently Asked Questions
What is a financial audit in Morocco and when is it required?
A financial audit in Morocco is an independent examination of a company’s financial statements to verify their accuracy and compliance with accounting standards. It is mandatory for public limited companies (SA) and for companies exceeding certain turnover thresholds. The audit provides assurance to shareholders, creditors, and other stakeholders.
What standards govern financial audits in Morocco?
Financial audits in Morocco are conducted in accordance with the audit standards manual published by the Order of Chartered Accountants, which aligns with International Standards on Auditing (ISA). The auditor must implement all procedures required by these standards, failing which they may incur disciplinary, civil, or criminal liability.
What are the different types of audit opinions in Morocco?
The auditor may express an unqualified opinion when the financial statements give a true and fair view, a qualified opinion in case of limited disagreement or scope limitation, or a disclaimer of opinion when significant errors exist or when the auditor could not perform necessary procedures. The type of opinion issued directly impacts stakeholder confidence.
OUR SERVICES
Consolidated Accounts: Assistance and Audit Statutory Audit & Independent Audit Due Diligence
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