Austrian Financial Reporting Enforcement Panel

The establishment of an audit procedure for the financial reporting of companies whose home country state is Austria pursuant to Section 1 no. 14 BörseG 2018 and whose securities are admitted to trading on a regulated market (‘capital market-oriented companies’) by the Financial Reporting Enforcement Act (RL-KG) is carried out in implementation of Regulation 1606/2002/EC (‘IAS Regulation’) of the European Communities of 2004, which prescribes the mandatory application of International Financial Reporting Standards (IFRS) for such companies. The aim is to strengthen confidence in the capital market in Austria.

The RL-KG was passed by the Austrian National Council in December 2012 and came into force on 1 July 2013. The law must be applied for the first time to financial statements and other prescribed information for the financial year ending after 30 December 2013.

The Austrian Financial Reporting Enforcement Panel (AFREP) is an independent, non-profit organisation under private law that was recognised by the Federal Ministry of Finance after consultation with the Federal Ministry of Justice. The association has set up an enforcement panel which generally carries out the audit of company financial statements and reports and is not subject to instructions in its activities. The Financial Market Authority (FMA) acts as an authority pursuant to Section 3 (1) RL-KG.

The enforcement panel is managed by a chair and a deputy chair. The independent auditing activities are carried out by auditors who are not subject to instructions and who must demonstrate many years of experience in performing, auditing, advising, monitoring or teaching activities in the field of financial reporting. A comprehensive control system - by means of specially established audit panels (‘checks and balances’) - and a continuous six-eyes principle prevent potential incompatibilities in advance and ensure an objective and high-quality audit.