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Professional responsibilities for external auditors (Austria)

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29 Jul 2001

Within the coming weeks, regulation concerning the professional responsibilities of external auditors is likely to be amended.

Currently, auditor liability in relation to audit engagement negligence is limited to €0.363 million. It is expected that the penalty will increase to €1 million where required due care has not been exercised. However, in the case of public companies, the maximum penalty is expected to increase to €4 million, and in cases of gross negligence the penalty is expected to be multiplied by 5.

Also, due to proposed changes to the Austrian Banking Act, the liability of the auditors of banks is expected to be based on the amount of total assets, and to be between €2 million and €6 million.

New regulations concerning external rotations is also likely to be introduced into the Austrian Banking Act. The regulations would require a change of auditors at least every five years. External rotations have also been discussed for insurance companies and other listed companies. However, no regulations have as yet been proposed.

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