Internal Control Finance Audit for French Subsidiary Company
Independent internal financial control audit for the Indian subsidiary of a French group, designed around what your head office reports on and what Indian law requires.
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What is an internal control finance audit for a French subsidiary company in India?
It is an independent review of the processes and controls behind the Indian subsidiary's financial statements: how transactions are authorised, recorded, reconciled and reported. For a French parent the work is aligned with the French internal control framework issued by the AMF and the Financial Security Law and group reporting expectations, while also meeting Indian requirements such as the auditor's report on internal financial controls under Section 143(3)(i) of the Companies Act, 2013.
Why French groups need local control assurance
In India, the statutory auditor of a company reports on whether adequate internal financial controls (IFC) over financial reporting exist and operate effectively (Section 143(3)(i) of the Companies Act, 2013, read with the ICAI Guidance Note on Audit of Internal Financial Controls). Certain small private companies are exempt from that statutory report, but a foreign parent usually needs the same assurance for its own group reporting.
French groups pair financial control with an active anti-corruption and vigilance agenda. The review therefore covers both accounting controls and the compliance trail around third parties.
Frameworks and head-office expectations
Frameworks we align to
- the French internal control framework issued by the AMF and the Financial Security Law
- IFRS or French GAAP group reporting
- Indian Companies Act, 2013 and CARO 2020
What your French head office expects
- Control evidence supporting the parent's risk management and internal control reporting
- Anti-corruption compliance programme in line with the Sapin II law, including third-party due diligence
- Group reporting aligned to French statutory auditors' (commissaires aux comptes) instructions
- Controls that support the parent's duty of vigilance across the supply chain
Gaps we commonly find
Common gap 1
Third-party agents and distributors onboarded without documented due diligence
Common gap 2
Gifts, hospitality and facilitation payments not captured in the books
Common gap 3
Contracts and discounts approved outside the system
Common gap 4
Group reporting calendar not aligned with the Indian year-end
What the engagement covers
| Area | Requirement | How we address it |
|---|---|---|
| Control framework | AMF reference framework for internal control | Entity-level, process and IT general controls documented and tested |
| Anti-corruption | Sapin II programme for larger groups | Third-party due diligence and expense-control testing in India |
| Auditors | Commissaires aux comptes group instructions | Evidence pack for group and statutory auditors |
| Reporting standard | IFRS / French GAAP | Bridge from Ind AS or Indian GAAP |
| Local law | Not a French requirement | Section 143(3)(i) report, CARO 2020, GST and TDS controls |
Reporting calendar
French groups commonly report on a calendar year, so reporting calendars should bridge the Indian March year-end.
How the audit runs
Scoping
Agree entities, processes, materiality and the reporting standard your parent uses.
Documentation
Walk through processes; build flowcharts and risk-control matrices.
Testing
Test design and operating effectiveness on samples; record exceptions.
Reporting
Issue findings, ratings and a remediation plan in your group format.
Follow-up
Retest remediated controls before the year-end audit.
Frequently asked questions
Does Sapin II apply to my Indian subsidiary?
Sapin II requires larger French groups to run an anti-corruption programme that covers their subsidiaries. Indian entities are usually asked to apply the group code, third-party due diligence and accounting controls.
What is the duty of vigilance?
It is a French law requiring large groups to identify and prevent serious risks in their own operations and supply chains. Finance and procurement controls in India help provide the evidence.
Can you test expense and gift controls?
Yes. We test hospitality, gifts, donations and agent commissions for approvals, supporting documents and correct accounting.
Do you cover IT general controls?
We include key IT general controls such as user access, segregation of duties and change management for the finance systems.
How long does an internal control finance audit for a French subsidiary take?
A focused review of key processes usually takes three to six weeks, depending on the number of entities, locations and processes. Testing is scheduled around your month-end close and your parent's reporting dates.
Can the report follow my French head office's template and language requirements?
Yes. We prepare working papers and the final report in English and map findings to the rating scale and format your head office uses, so it can be consolidated without rework.
What is the difference between a statutory audit, an internal audit and an IFC audit?
A statutory audit gives an opinion on the financial statements. Internal audit is a management-commissioned review of processes and risks. An IFC audit tests whether controls over financial reporting are designed and operating effectively. The three are related and we align them to avoid duplicate work.
How often should controls be tested?
Key controls are generally tested annually, with higher-risk areas tested half-yearly or quarterly. After remediation we retest the affected controls before year-end.
Do you help fix the gaps you find?
Yes. We deliver a prioritised remediation plan with owners and deadlines, and can help rewrite procedures, set approval limits and train the local team.
This page gives general information as of publication and is not legal, tax or investment advice. Rules, thresholds and fees change — confirm current requirements with a qualified professional before acting.
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