On 26 November 2021, the French anti-corruption agency (“AFA”) submitted for public consultation, a draft practical guide on anti-corruption accounting controls in companies.

This guide, which is presented as an educational collection of best practices and illustrations[1], aims to assist companies subject to the obligation provided for in Article 17 of the Sapin 2 Law in the implementation of “internal or external accounting control procedures intended to ensure that books, registers and accounts are not used to conceal acts of corruption or influence peddling”[2].

It sets out general accounting concepts (I) before defining anti-corruption accounting controls (II) and specifying their implementation (III).

I.  Keeping accounts is a legal obligation that helps reduce corruption risks

The guide notes that an accounting that complies with legal and regulatory requirements effectively contributes to the prevention and detection of corruption[3].

As a preliminary point, the AFA reminds the legal obligation for all companies to keep accounts that comply with the standards set by the French accounting standards authority (“Autorité des normes comptables”) and that meet five key principles: true and fair presentation, comparability and continuity of operations, regularity and fairness, caution and consistency of methods[4].

Then, the AFA details some of the accounting rules to be implemented (non-offsetting rule, recording of assets at historical cost, keeping of accrual accounts, information retention and prohibition of parallel accounting) as well as the requirements for proper recording of entries, which implies particularly clear objectives and scope of responsibilities between individuals involved in an operation, standardized accounting procedures, and a quality reporting system[5].

II. Anti-corruption accounting controls are complementary to general accounting controls and incorporate internal control based on risk mapping

According to the guide, the concept of “anti-corruption accounting controls” refers to the accounting controls mentioned in Article 17 of the Sapin 2 Law[6] and is precisely so called because these controls must be based on corruption risks mapping as it determines where it is necessary to complement corruption-related risks management measures, which include accounting controls, with anticorruption accounting controls[7].

Thus, it appears that anticorruption accounting controls are simply meant to complement or deepen existing accounting controls[8]. For instance, they may be implemented where the risks of corruption are insufficiently covered by existing controls[9], in case of accounting processes (e.g., manual accounting registration or non-existing third-party accounting controls[10])and accounting transactions (e.g., human resources management scheme, expenditure processes without controls and exceptional transactions[11]) that warrant increased caution, or sensitive accounts such as ‘miscellaneous’ accounts[12].

III. The implementation of anti-corruption accounting controls is similar to that of general accounting controls

The AFA explains that anti-corruption accounting control methods differ from general accounting methods only in the way they are applied, depending on the risk situations identified by the corruption risks mapping[13]. Thus, the AFA suggests following existing control methods, namely the accounting review method, the analytical review method, the sampling control method, or the comparison with physical reality method[14]. It further suggests that these methods be carried out on standard accounting documents such as the balance sheet, the income statement, the notes to financial statements, the general ledger, the journal, legal registers of the company and the accounting analytical presentation documents[15].

Additionally, the guide states that, similarly to general internal controls, the anticorruption accounting controls are carried out at three levels[16]:

• A first level of control generally carried out by the person responsible for entering and validating accounting entries;
• A second level of control that is carried out throughout the year by a person independent of the one who carried out the first-level control, whose purpose is to ensure the proper execution of the first-level anti-corruption accounting controls; and
• A third level of control (accounting audits) assessing the relevance, effectiveness, and compliance with corporate requirements of anti-corruption accounting controls, and specifically the governance and resources allocated to anti-corruption accounting control procedures and the method of development and application of the first two levels of controls.

The guide further adds that anti-corruption accounting controls must follow a specific and standardized procedure, the purpose of which is to primarily determine the scope of the controls, their durations, and modalities, including a precise definition of the roles and responsibilities of the various parties involved[17]. This procedure itself should be subject to a control system to ensure its adequacy and effectiveness[18].

Finally, the AFA concludes that the results of anti-corruption accounting controls must give rise to a real response from the company, which must, for example, implement corrective measures, update its risk mapping, or conduct an internal investigation[19].

The guide, which should be published in the first term of 2022, will probably be enriched as it is opened for public consultation until 7 January 2022.