Which companies are subject to the examination and what is the subject of the examination?
The RL-KG applies to those capital market-oriented companies whose home member state is Austria pursuant to § 1 Z 14 BörseG 2018 and whose securities are admitted to trading on a regulated market (§§ 1 and 2 RL-KG). This means that all issuers whose home member state is Austria and who have issued shares, bonds, warrants and certificates on the Vienna Stock Exchange in official trading and/or on regulated markets in other member states are covered by the obligation of the RL-KG in Austria. Other forms of securities trading (e.g. the multilateral trading facility Vienna MTF operated by the Vienna Stock Exchange) are not covered by these provisions.
The subject matter of the examination shall be the annual financial statements, management reports, consolidated financial statements and consolidated management reports as well as other information pursuant to § 1 fig. BörseG 2018. An examination shall only include the annual financial statements if no consolidated financial statements have been prepared by the company. It shall only cover the most recently adopted annual financial statements and consolidated financial statements as well as the half-yearly financial reports of the previous and current financial year and shall not refer to the auditor's opinion.
When does the Enforcement Panel become active?
The Panel's examination is carried out through the cooperation of companies on a voluntary basis. If the company cooperates in an audit by the Enforcement Panel, the legal representatives of the company and the other persons used by the legal representatives in the cooperation are obliged to provide the Enforcement Panel with correct and complete information and to submit correct and complete documents.
The Enforcement Panel shall act
- "Focus examinations" - in the event of specific indications of a breach of accounting regulations in accordance with the public interest - if the possible breach is likely to be significant for the correct information of the capital market;
- "Sample examination" - without specific cause in accordance with the examination plan.
The head of the Enforcement Panel initiates the examination procedure and informs the company under examination. If the enterprise to be examined refuses to cooperate, the head of the Enforcement Panel shall inform the FMA accordingly. If the enterprise declares its willingness to cooperate, the head of the Enforcement Panel shall open the examination procedure. An enforcement panel shall be appointed; the Enforcement Panel shall comprise the head and the deputy head of the Enforcement Panel as well as a report reviewer. Another member of the Enforcement Panel is appointed as the person responsible for the examination. The results of the examination by the person reponsible for the examination and the opinion of the report critic are dealt with by the examination panel, which determines whether there are any accounting errors.
Focus of the examination?
The enforcement priorities are determined annually by the FMA on the basis of the priorities announced by the European Securities and Markets Authority (ESMA) at the proposal of the Enforcement Panel (Article 1 par. 2 of the Audit Directive).
What are the consequences of the results of the examination?
If the examination does not result in any objections, the company must be informed of this in writing. If the examination shows that the financial reporting is incorrect, the Enforcement Panel must give reasons for its decision and give the company the opportunity to comment on or accept the results of the examination within a reasonable period of time.
The Enforcement Panel shall report to the FMA on the results of the examination. It must also inform the FMA whether the enterprise agrees with the result of the examination. The FMA may order the publication of the accounting error or significant parts of its justification, which the respective companies shall immediately publish on their own homepage or the website of the FMA or on the website of the regulated market pursuant to Article 8 par. 3 fig. 3 or 4 KMG 2019. Upon application of the company, the FMA may refrain from issuing the order if the publication is likely to harm the legitimate interests of the company.
The Enforcement Panel shall report to the FMA facts giving rise to the suspicion of a criminal offense in connection with the financial reporting of an issuer. Facts giving rise to the suspicion of a breach of professional duty by the auditor shall be reported to the Chamber of Tax Advisors and Auditors. The FMA shall, ex officio, observe and report to the exchange operating company any facts that indicate the existence of a violation of stock exchange regulations.
When does the FMA take over the examination activity?
The FMA must conduct the examination itself if an undertaking refuses to cooperate in an examination by the Enforcement Panel or does not agree with the results of the examination; or
- there are substantial doubts as to the accuracy of the examination result of the Enforcement Panel or the proper conduct of the examination by the Enforcement Panel; or
- the conduct of the examination by the FMA is necessary in individual cases, taking into account the public interest in the correctness of the financial reporting and in compliance with the principles specified in Article 18 par. 1 AVG.
If the examination by the FMA reveals that the financial reporting is incorrect, the FMA shall establish the error by means of an administrative decision.
What are the consequences of incorrect or incomplete information provided by the undertakings?
Any person who intentionally provides incorrect or incomplete information or submits incorrect or incomplete documents in violation of the Enforcement Panel or the FMA commits an administrative offense and is subject to a fine of up to EUR 100.000,00 by the FMA (Article 13 RL-KG).