The appointment of a legal auditor in Morocco is mandatory for S.A.
The law 17-95 has set up a general regulatory framework to guarantee the reliability of financial information. Indeed, the statutory auditor in Morocco has a legal audit mission. He must certify that the summary statements reflect a true and fair view of the financial position and assets of the company.
The auditor is appointed from among the members of the Order of Chartered Accountants. He or she must comply with conditions of independence and competence.
In this article, we answer the main questions about the mission of the auditor.
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What is a legal auditor in Morocco?
The Statutory Auditor (legal auditor) is a diligent and independent professional who carries out for his client a mission of general interest.
Indeed, the mission of the auditor is :
- First, to perform a legal audit in order to certify the accounts of his client;
Secondly, to carry out missions related to the audit (certification of current account, contribution audit, transformation audit…)
- The auditor is the guarantor of equality between shareholders. Indeed, he must ensure that the interests of minority shareholders are protected. He must also alert the authorities in cases of emergency (continuity of operations, for example).
Are companies obliged to appoint a legal auditor – Statutory auditor ?
The law requires the appointment of a statutory auditor (Commissaire aux comptes) in the following cases:
- Firstly, public limited companies: law 17-95 requires all public limited companies to have an auditor in Morocco
- Secondly, companies with a turnover exceeding 50 million dirhams. Thus, whether they are SARLs or other forms, an auditor becomes mandatory as soon as this limit is exceeded.
Who can be appointed as statutory auditor (legal auditor) in Morocco ?
No one can exercise the mission of legal auditor in morocco if he is not registered with the Order of Chartered Accountants.
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What are the missions of the legal auditor in Morocco ?
The legal auditor in Morocco, according to the law, has a mission of general interest. Thus, he must :
Perform a certification of accounts (legal control)
The auditor through a control of accounting values ensures that:
- First, that the company establishes its accounts according to the Moroccan accounting standards;
- Then, that the accounts are regular and sincere;
In addition, that the accounts reflect in all their significant aspects a faithful image,
- the result,
- the financial situation
- and assets of the company
By virtue of this mission, the legal auditor in Morocco prepares a general report.
Indeed, the CAC addresses this report to the general assembly. He expresses therein his opinion which can be :
- Firstly, an unqualified certification of the accounts;
- Secondly, a certification with reservations;
- Finally, a refusal to certify or an impossibility to give an opinion
The company must file the auditor’s general report with the court clerk. It is therefore open to public consultation. In the case of companies making a public offering, it must be published in a legal gazette.
Verification of regulated agreements
The auditor in Morocco must also issue a special report on regulated agreements.
The regulated agreements are contracts that the company signs with either its :
Shareholders (if the latter have more than 5% of the capital)
The special report draws up an inventory of these agreements and their conditions. The auditor presents it to the vote of the general assembly.
Other missions of the auditor in Morocco
In addition to the above mentioned missions, the auditor has other roles:
Role of warning
The law obliges the statutory auditor in Morocco to inform the shareholders (and sometimes the authorities) of the criminal acts that he identifies during his mission.
The law gives other related missions to the CAC.
What are the related missions of the auditor in Morocco?
They are, in particular, :
- Firstly, verification of the respect of equality between shareholders;
- Secondly, to express his opinion in case of suppression of the preferential subscription right;
- Thirdly, to certify the debts which are to be used for a capital increase by compensation with debts;
- Fourthly, to express its opinion on the proposed issue of bonds convertible into shares;
- Fifthly, to give its opinion on the projects of reduction of capital;
- Sixth, to give its opinion on the creation of preferred dividend shares
How is the remuneration of an auditor determined in Morocco?
The law does not set the remuneration of the auditor. However, the Order of Chartered Accountants has issued a standard for setting fees.
The fees take into account :
- First, the nature of the mission or service
- In addition, the size and complexity of the activities of the audited entity.
The purpose of this standard is to prohibit members from accepting fees that limit the scope of their work.
The standard sets the average minimum hourly rate at 500 MAD.
In addition, the standard requires the auditor in Morocco to set the number of hours according to volume of activity of the company.
What are the tasks that the statutory auditor must perform to issue his opinion?
The mission of the auditor includes :
- Firstly, a general knowledge of the company he is auditing;
- Secondly, a planning of the audit work which takes into account :
- First, the identification of a materiality threshold;
- Second, the assessment of risks
- Finally, the determination of the work relevant to cover each of the risks it identifies
- Third, an assessment of the company’s internal control;
- Fourthly, targeted controls to ensure the fairness and compliance of the accounts;
- Finally, other work that he deems necessary.
The statutory auditor, performs in particular works such as :
- Requesting direct confirmations from third parties (bank balances, supplier balances, …)
- On-site verifications (physical inventory of stocks in particular)
- Evaluation of accounting documents (purchase orders, invoices,…)
- Analytical and logical examinations
The opinion of the auditor in Morocco remains his exclusive responsibility.