1. Evaluations of the problems and difficulties encountered by Audit Firms - Sustainability and Social Responsibility

2. Loïc Wallaert, Mazars – International Symposium on Auditing in Turkey – 26 april 2007 2 Introduction  Responsibility  Can be legal Linked to the profession or to the Law  Can be moral “Responsibility today is a catchword, one of several which the French 20 th century poet and critic Paul Valéry believes to have more value than meaning” Alain Etchegoyen, Philosopher, Corporate Accountability and trust by Mazars

3. Loïc Wallaert, Mazars – International Symposium on Auditing in Turkey – 26 april 2007 3 Introduction  Corporate Accountability  The notion of corporate accountability is fast-growing, with recognised long term benefits.  The perception of corporate accountability depends on: The CEO him/herself The stakeholders  New structure E.g. appointment of independent administrators, creation of audit committees, the increasing importance given to social rating agencies, etc.

4. Loïc Wallaert, Mazars – International Symposium on Auditing in Turkey – 26 april 2007 4 Auditor accountability: beyond the rules  Our profession entails responsibility on a daily basis  Certification: Auditors carry out assessments in order to certify that annual financial statements give a true and fair view of a company’s financial position following the operations realised during a financial year. They also aim to give a true view of the assets of a person or entity at the end of the financial year.  Information: Auditors communicate the results of their investigations to corporate executives and partners  Complaints: Auditors must inform the Public Prosecutor of any infraction committed within the company which were discovered during the various investigations. Auditors must respect confidentiality when in contact with third parties.  Risk prevention: In France, for example, an alert procedure must be given to the attorney if the auditor detects any information which could compromise operation continuity.

5. Loïc Wallaert, Mazars – International Symposium on Auditing in Turkey – 26 april 2007 5  Auditors are involved in civil liability plus criminal and disciplinary responsibility  Civil liability: Professionals wrong doings and negligence (often covered by professional insurance).  Criminal responsibility: Violation of professional confidentiality, non disclosure of any infractions, continued occupancy of position despite incompatibilities or bans, false or incomplete reports.  Disciplinary responsibility: In France, initial judgement takes place in the CRCC Regional Disciplinary Chamber, and then in the H3C. Auditor accountability: beyond the rules

6. Loïc Wallaert, Mazars – International Symposium on Auditing in Turkey – 26 april 2007 6  Mazars goes beyond the professional obligations which govern audit and advisory work by applying the same accountability and transparency rules to itself as it does to its clients.  E.g. : Publication of annual reports in IFRS standards  And it participates to this debate via its publication … Mazars has chosen transparency…

7. Loïc Wallaert, Mazars – International Symposium on Auditing in Turkey – 26 april 2007 7 The notion of Responsibility is influenced by culture  Law Culture  The notion of Responsibility is highly influenced by a strictly regulated environment (SOX) which leaves little place for moral consideration  Moral Culture  The notion de Responsibility goes beyond the application of rules and takes moral and societal principles into account  Moral obligation: to contribute to the environment in which the business is evolving Encouraging and assisting employees to develop professionally Common values and rules of conduct Social initiatives Cultural initiatives Environmental initiatives Executives: setting a good example

8. Loïc Wallaert, Mazars – International Symposium on Auditing in Turkey – 26 april 2007 8 Why should a business strive to be accountable?  To gain confidence of shareholders and stakeholders  Corporate Accountability creates 4 main competitive advantages:  Improvement of the company’s image  Value creation for the company  Contribution to creating positive change  Help in reinforcing a group corporate culture

9. Loïc Wallaert, Mazars – International Symposium on Auditing in Turkey – 26 april 2007 9  Social rating agencies  “We aim to present a partnership vision of the company which, certainly, acknowledges shareholders’ essential role, but which also highlights the importance of other stakeholders.” Nicole Notat, President of Vigeo, Corporate Accountability and Trust  “I observe that more and more companies are turning to us for Corporate Responsibility audits. This suggests, I believe, a growing consciousness on the part of management that they must evaluate their performance in this area, too, and that the conclusions of our audits can be strategic governing tools for them.” Nicole Notat, President of Vigeo, Corporate Accountability and Trust  Banks such as HSBC  “This approach [new structure created to implement Corporate Social Responsibility] has enabled the definition and implementation of a risk management policy that includes social and environmental criteria when we are considering the financing of a project.” Stephen Green, Chairman and Executive Director of the HSBC Group, Corporate Accountability and Trust  Young people are increasingly attracted to accountable businesses Stakeholder demands

10. Loïc Wallaert, Mazars – International Symposium on Auditing in Turkey – 26 april 2007 10 Conclusion  Responsibility and Trust are the key notions of tomorrow  The increasing implication of CEOs Increasing concern of the role that a business plays in its environment Definition of concrete actions Implementation of a business culture through natural yet structured teaching  Increasing awareness of economic and social actors Involvement of political authorities Increasing public demand for businesses to be ‘responsible’ Implementation of a regulatory framework Multiplication of information about business sustainable development initiatives Teaching of ethics given at universities and business schools

11. Loïc Wallaert, Mazars – International Symposium on Auditing in Turkey – 26 april 2007 11 Conclusion  The production of wealth life cycle The notion of business is local …it then becomes source of national wealth …it then becomes global and may damage the environment Now businesses have to find a balance between increasing wealth and preserving the environment.

12. Mazars 61 Rue Henri Regnault 92075 Paris-La Défense cedex France Tél.: +33 (0)1 49 97 46 45 Fax: +33 (0)1 49 97 46 95 www.mazars.com