The new directive modifies the 4th and 7th company law directives ('accounting directives' 78/660/EEC and 83/349/EEC), and also the accounting directives for banks (86/635/EEC) and insurance undertakings (91/674/EEC). It establishes collective responsibility of board members for the financial statements and annual reports, enhances transparency in related parties' transactions and off-balance sheet arrangements, and, for publicly traded companies, introduces a requirement for a corporate governance statement. The size thresholds for exempting small and medium-sized entities from specified accounting and auditing rules were also raised. The new directive must be signed by the Presidents of the Council and the European Parliament, and then will take effect 20 days after publication in the Official Journal of the EU. EU member states will then have two years to enact the provisions of the new directive into their national legislation. Click for (PDF 117k).