The law will come into force in July 2013 and and is applicable to the financial statements of all groups listed on the Vienna stock exchange. Considering the size of the review panel yet to be set up, examining the financial reporting of companies will probably rely on sample testing.

The enforcement process is modeled on the German enforcement system that has been successfully operating since 2005. It will be performed in two stages; the first stage involves a government-appointed privately organised institution, the Austrian Review Panel for Financial Reporting (Österreichische Prüfstelle für Rechnungslegung) with the review panel as its active body, while the second stage is performed by the Federal Financial Supervisory Authority (Finanzmarktaufsicht, FMA), which has sovereign authority.

The responsibilities within the enforcement process will be shared between the review panel and the FMA:

• the review panel ensures that the financial statements have been drawn up in accordance with the applicable accounting standards,
• the FMA decides on enforcement priorities and audit plans,
• should a company not be willing to cooperate with the review panel or question the decision of the review panel, the final decision lies with the FMA,
• the FMA will carry out the official proceedings.

Please click for the full text of the newly passed law (German language document, link to Austrian parliament website).