Draft Law on Amen of Regulations Regarding Accounting and Audit: New Challenges for Businesses in Light of European Union Law
In recent years, the European Union has been intensively working on harmonizing and improving standards in the field of corporate reporting and auditing. In this context, a new legislative initiative has been committed at implementing the forecasts contained in the directions of the European Parliament and the Council (EU) 20222/2464 and the delegated Commission (EU) 2023/2775.
Changes in corporate reporting respecting sustainable development
The first of the aforementioned directions, 2022/2464, deals claims to regulations and directions related to reporting on sustainable development by companies. It introduces new standards regarding environmental, social, and governance information in companies, aiming to promote corporate responsibility and transparency in corporate actions.
The draft law, based on this directive, introduces new reporting requirements for companies, imposing on them the liability to report not only financial results but also actions taken in the area of sustainable development.
Adjustment of enterprise size criteria
Another significant change results from the delegated Commission direct (EU) 2023/2775 is the adaptation of enterprise size criteria. The existing definitions of micro, small, medium, and large entities are revised to better reflect economic reality and promote the development of small and medium-sized enterprises.
The draft law takes these changes into account, which may result in the needed for companies to adapt to new requirements regarding classification and reporting obligations.
Conclusion
The draft law claims the Accounting Act, the Act on Certified Auditors, Auditing Firms, and Public Supervision, and certain other acts represent an important step towards harmonizing and standardizing accounting and auditing standards in compliance with European Union law.
The introduction of new reporting requirements related to sustainable development and the adjustment of enterprise size criteria pose challenges for companies, but also an opportunity to improve transparency, responsiveness, and competitiveness of the European business sector.
It is expected that this project will subscribe to the building of a more sustainable and competitive economy, in line with the values and goals of the European Union.
