From the moment they are created and during their activity, companies are subject to several accounting obligations.These obligations are defined in the law and the commercial code, and must be respected by companies. The sanctions that arise after these breaches are generally fiscal in the form of penalties. They can also give rise to sanctions in commercial law and/or criminal law.

There are two main types of risks for failure to comply with accounting obligations:
-A lack of accounting
-An inaccuracy in the annual accounts

Lack of accounting

Failure to keep accounts when they are mandatory can have serious consequences for the company and the manager during a tax audit. No reason given to justify this absence will be accepted by the auditor. The tax authorities will decide to reconstruct the company's accounts and determine its results and turnover itself. The manager can offer to reconstruct his accounts, thus relieving the auditor of this task. The latter could then grant him additional time. As a result, the manager will have to retrieve the bank statements for the periods concerned from his bank and ask his suppliers for duplicates of their invoices as supporting documents during the next audit.

Penalties for failure to maintain accounting are provided for in the Commercial Code.

-In tax law: the penalty is ex officio taxation. In the most serious cases, a lack of accounting can be considered a opposition to tax audit. In this case the penalties are then 100%.

In terms of VAT, the auditor will reconstruct the turnover achieved by the company from bank statements and the VAT collected. No Deductible VAT will be calculated..

- In commercial law, the absence of accounting is often only noted in the event of recovery or compulsory liquidation. This absence leads to bankruptcy, personal bankruptcy of the manager or trader as well as additional penalties such as a ban on managing a business again. Not keeping accounting records is a mismanagement which is punishable by a fine of 9,000 euros in the case of SARL, SA, SAS, limited partnerships and limited partnerships with shares. This fine mainly concerns the manager.

Inaccuracy of annual accounts

Inaccuracy of annual accounts is punishable by tax law. It results in:

The rejection of accounting : is the consequence of the concealment of cash receipts or when the accounting does not allow for the control of receipts and expenditures. The accounting is said to be irregular, incomplete or not properly kept. It will therefore be rejected.

The tax administration reconstructs the taxable income either from purchases or from the taxpayer's enrichment. Late payment interest may be added for late payment. An additional increase of 10% of the additional rights or 40% if the taxpayer's will is demonstrated. It can increase up to 80% in the event of fraudulent maneuvers

There is also another breach of accounting obligations, fictitious accounting. It can be punished by two offences:

The offence of presenting an inaccurate balance sheet
Distribution of fictitious dividends

The director of a company who keeps fictitious accounts can be punished with 5 years of imprisonment and a fine of 375,000 euros