On June 17, 2016, new EU statutory audit rules became applicable throughout the European Union. Their aim is to enhance transparency of financial reporting, provide auditors with a strong mandate to be independent, foster market diversity, and strengthen EU-wide supervision.
These rules consist of the Directive 2014/56/EU setting out the framework for all statutory audits and the Regulation No 537/2014 setting out specific requirements for statutory audits of Public-Interest Entities (PIEs), such as listed companies, banks and insurance entities.
The implementation under Austrian law brings new duties and responsibilities for the company's audit committee ("Prüfungsausschuss") according to the amended Art 92 para 4 a of the Austrian Stock Corporation Act and the amended Art 30 g para 4 a of the Austrian Limited Liabilities Act. The new provisions are in force since June 17, 2016.
In a nutshell, the new provisions include composition requirements for audit committees and more responsibilities. For instance, an audit committee shall play a direct role in the appointment of the audit firm. It shall also monitor the statutory audit, as well as the performance and independence of the statutory auditor. One can clearly say these changes to the rules on audit committees bring new challenging responsibilities for the supervisory boards of PIEs.