The establishment of an enforcement process for the financial reporting of companies whose securities are admitted to trading on a regulated market ("publicly traded companies") and whose Member State of Origin is Austria is required under the law on financial reporting enforcement (Rechnungslegungs-Kontrollgesetz RL-KG). It continues the process of implementing European Community Regulation 1606/2002/EC of 2004, which makes the application of International Financial Reporting Standards (IFRS) mandatory for such companies. The objective is to strengthen confidence in the Austrian capital market.
The Accounting Control Act (RL-KG) was passed by the Austrian Parliament in December 2012 and came into force on 1 July 2013. The provisions of the Act must be applied with respect to financial statements and other relevant information for financial years ending on or after 30th December 2013.
AFREP is an independent, not-for-profit association under Austrian private law which has been recognised by the Federal Ministry of Finance after review by the Federal Ministry of Justice. AREP's Enforcement Panel is responsible for carrying out review of companiesâ€™ financial statements and reports. It is independent and not subject to external influence. The Austrian Financial Market Authority (FMA) is the competent authority for the purposes of section 3(1) RL-KG.
The Enforcement Panel is headed by the Chairman and the Vice Chairman. The independent reviews are carried out by independent members of the Enforcement Panel, who must be able to demonstrate many years of experience in preparing, reviewing or monitoring financial statements, or in advising on or teaching financial accounting and reporting. A comprehensive system of controls, involving specially appointed review committees (â€œchecks and balancesâ€) and insistence on the three person principle throughout precludes potential conflicts of interest from the start and ensures objective, high quality reviews.