Austria

Member Organizations

Member Organization Associate Other PAOs

  Institut Österreichischer Wirtschaftsprüfer
  Kammer der Wirtschaftstreuhänder

Legal and Regulatory Environment

  • Overview of Statuatory Framework for Accounting and Auditing

    Austria, a European Union (EU) member state, is subject to legislation issued by the European Commission. Two key pieces of EU legislation that are relevant to the accounting, auditing, and financial reporting statutory framework in Austria are: (i) Regulation (EC) No 1606/2002 (IAS Regulation), which requires the application of EU-endorsed IFRSs in the preparation of the consolidated financial statements of entities with stocks traded on a regulated market in the EU; and (ii) EC Statutory Audit Directive, 2014/56/EU (that amends Directive 2006/43/EC), and Regulation 537/2014, which stipulate the requirements for the performance of statutory audits. These laws are transposed into, and supplement, various national laws, which outline the accounting, auditing, and financial reporting obligations in Austria. The main laws are:

    • Unternehmensgesetz (Austrian Commercial Code, UGB). This law outlines requirements for the performance of statutory audits, and stipulates that statutory audits must be conducted by certified public accountants. The UGB also sets mandatory accounting requirements based on the legal form of an entity and established thresholds. It also outlines Austrian Generally Accepted Accounting Principles (GAAP), which have some similarities with IFRSs.
    • Rechnungslegungsgesetz (Financial Accounting and Reporting Act, RLG). This law, dated 1990, mandates that bookkeeping and financial statements must be prepared in accordance with Austrian GAAP.
    • Wirthschafts-Treuhandberufsgesetz (Public Accountants Statute of Professional Practice, WTBG). This legislation, dated 1999 with subsequent amendments, organizes the profession, outlines key provisions related to the Kammer der Wirtschaftstreuhänder (Chamber of Public Accountants, KWT), and lays out education, examination, and certification requirements. The WTBG also authorizes the KWT to issue directives and regulations on professional practice.
    • Abschlussprüfungs-Qualitätssicherungsgesetz (Audit Quality Assurance Act, A-QSG). Dated 2005, this law establishes public oversight of the audit profession.
    • Wirtschaftstreuhanderberufs-Ausübungs-richtlinie (WT-ARL, Directive on the Practice of the Public Accounting Professions). The KWT issued this legislation in 2003, with subsequent amendments, to provide guidelines on the Code of Ethics, continuing professional development, prevention of money laundering, and terrorist financing.

    All commercial enterprises have obligatory bookkeeping responsibilities, with simplified financial reporting requirements for small entities. Entities with annual turnover greater than € 700,000 are required to prepare statutory financial statements in accordance with Austrian GAAP. Details of accounting standards are established and outlined in the UGB and the Financial Accounting and Reporting Act. A private body established by the profession, the Austrian Financial Reporting and Auditing Committee, advises the government on accounting and auditing standards and serves as the de facto accounting and auditing standard setter.

    Statutory audits are mandatory for all banks, insurance companies, and investment funds, public corporations, large and medium-sized limited liability companies (LLCs), and small LLCs having a supervisory board. National auditing standards are derived from various sources, such as the Austrian Commercial Code and standards of professional conduct issued by the professional accounting organizations (PAOs). The professional standards issued by the PAOs are not legally binding but are generally accepted.

    The Austrian Banking Act grants authority to the Financial Market Authority to establish requirements for auditors that are appointed to audit banks, and to require additional reporting obligations by the entities that it supervises.

  • Regulation of Accountancy Profession

    The Austrian Commercial Code (UGB), the Audit Quality Assurance Act (A-QSG), and the Public Accountants Statute of Professional Practice (WTBG) outline the initial professional development (IPD) and continuing professional development (CPD) requirements for professional accountants, which are aligned with the applicable EU Directives and Regulations. The UGB establishes minimum requirements for initial entry to the profession, as well as those related to education, training, and examination.

    All candidates for achieving the certified public accountant (CPA) designation must meet minimum IPD requirements that cover initial entry to the profession, education, training, and examination. The Chamber of Public Accountants (KWT) is responsible for administrating professional examinations and the evaluation of candidates’ fulfillment of all prerequisites. Upon successful completion of professional examinations, candidates must take a professional oath prior to receiving the CPA designation and a license to practice from the KWT. The KWT sets auditing standards and maintains an investigative and disciplinary (I&D) system. KWT membership is mandatory for all CPAs. CPD requirements for the audit profession are determined by the KWT and by the Austrian Auditors Supervisory Authority (QKB).

    To be permitted to perform statutory audits, CPAs and audit firms must receive an additional license from the QKB’s Committee for External Quality Assurance Reviews (AeQ). Firms and individuals that are not licensed by the AeQ are only permitted to perform voluntary audits. As the public oversight authority, the QKB maintains an electronic register of all auditors and audit firms.

    The QKB monitors auditors’ compliance with applicable professional standards, laws, and regulations through the quality assurance (QA) review system. I&D procedures for members of the profession for non-compliance are outlined in the UGB, the A-QSG, and the WTBG. These laws grant authority to the QKB, AeQ, and KWT to sanction members of the profession. In addition, these bodies cooperate with the Financial Market Authority and the Austrian Review Panel for Financial Reporting, which monitor and enforce compliance of the consolidated financial statements of listed entities with IFRSs, to sanction auditors when they are found responsible for making errors in the financial statements.

    In Austria, there is also a category of accountants comprising certified management accountants, payroll accountants, and certified accountants who are mandatory members of the Austrian Economic Chambers.

  • Audit Oversight Arrangements

    The Austrian Auditors Supervisory Authority (QKB) was established in 2006 in accordance with the Quality Assurance Act, as the public oversight authority in Austria. The QKB is responsible for: (i) the quality assurance system; (ii) registration of statutory auditors; (iii) maintenance of the public register of all auditors and audit firms in the jurisdiction; (iv) enforcement of compliance with applicable laws, standards, rules and regulations (investigation and discipline); (v) preparation and publication of an annual report on the quality assurance system, and (vi) oversight of continuing professional development The QKB is a member of the International Forum of Independent Audit Regulators.

  • Professional Accountancy Organizations

    The following are the professional accountancy organizations in Austria, listed in alphabetical order:

    The Chamber of Public Accountants (KWT)

    Established in 1947, the KWT is a mandatory membership organization for all professional accountants in Austria. Its membership comprises certified public accountants (CPAs) and tax consultants. The Chamber’s responsibilities include: administering the professional examinations for CPAs and tax consultants; certifying individuals as CPAs; reviewing laws that are of relevance to the profession; establishing continuing professional development; setting auditing standards; and maintaining an investigation and discipline system in conjunction with other national regulators. The KWT is a member of IFAC and Fédération des Experts-comptables Europeéns (FEE).

    The Institute of Austrian Certified Public Accountants (IWP)

    The IWP is a voluntary association of individual auditors and audit firms with the primary objective of advancing the interests of CPAs and audit firms in Austria. The IWP is a member of IFAC and FEE.

  • Projects or Other Information

    Authorities are in the process of transposing the new EC Statutory Audit Directive, 2014/56/EU (that amends Directive 2006/43/EC), and Regulation 537/2014 into national law, and implementing the new requirements.

Adoption of International Standards

  • Quality Assurance

    Since 2005, quality assurance (QA) reviews are mandatory in Austria in accordance with the Audit Quality Assurance Act (A-QSG) of 2005. All statutory auditors and audit firms that perform statutory audits in Austria are subject to quality reviews at least every six years. Auditors of public interest entities are subject to quality reviews at least once every three years. The national professional standard on quality assurance (IWP/PG 7) incorporates the requirements of ISQC 1 and ISA 220.

    The A-QSG grants authority to the Austrian Auditors Supervisory Authority (QKB) to oversee the QA review system.

    The Committee for External Quality Inspections, which is part of the QKB, is responsible for implementing the system, and its duties include: (i) selection of inspectors who conduct the reviews based on the proposals submitted by inspectors chosen by auditors and audit firms; (ii) evaluation of review reports; and (iii) the issuance of the appropriate certificate to auditors based on results of the reviews.

    The Chamber of Public Accountants and Institute of Austrian Certified Public Accountants state in their 2015 SMO Action Plan that the QA review system in the jurisdiction is aligned with SMO 1.

    Current Status: Adopted

  • International Education Standards

    The Austrian Commercial Code (UGB), the Audit Quality Assurance Act, and the Public Accountants Statute of Professional Practice outline the initial and continuing professional development (IPD and CPD, respectively) requirements for professional accountants, which are aligned with the applicable EU Directives and Regulations. The UGB establishes minimum requirements for initial entry to the profession, as well as those related to education, training, and examination.

    Universities offer relevant degrees, which is the starting point for entry to the profession.

    The Chamber of Public Accountants (KWT) is responsible for administering professional examinations in accordance with the Public Accountants Statute of Professional Practice. The KWT has an official training institute, the Academy of Public Accountants, which offers educational programs for candidates. The Austrian Auditors Supervisory Authority and the KWT determine CPD requirements based on the Directive on the Practice of the Public Accounting Professions, and the Audit Quality Assurance Act, respectively.

    The KWT and Institute of Austrian Certified Public Accountants state in their 2015 SMO Action Plan that the IPD and CPD requirements are in line with the IESs.

    Current Status: Adopted

  • International Standards on Auditing

    The EC Statutory Audit Directive requires the application of EU-endorsed ISAs in the performance of statutory audits. Endorsement of ISAs issued by the IAASB is, however, still pending, and member states are permitted to prescribe national auditing standards.

    National auditing standards are primarily covered in non-legally binding professional standards issued by the Chamber of Public Accountants (KWT). In 2014, the KWT Expert Committee for Company Law and Auditing revised the national professional standards to incorporate ISA 200–810, with an effective date for periods ending after June 30, 2016. These standards include add-ons related to the scope of the audit, changes to the financial statements after the audit report has been issued, weaknesses in internal controls, and auditor reporting.

    Prior to the effective date in June 2016, audits will continue to be conducted in accordance with legal regulations set out in the Austrian Commercial Code, as well as previous professional standards issued by the KWT that are based on basic ISA principles and essential procedures.

    The Institute of Austrian Certified Public Accountants collaborates with the Institut der Wirtschaftsprüfer (IDW) in Germany on the translation of ISAs into German. The 2010 German translation of the Handbook of International Quality Control, Auditing, Review, Other Assurance and Related Services Pronouncements has been published.

    Current Status: Adopted

  • Code of Ethics for Professional Accountants

    Various legal sources outline ethical requirements for the accountancy profession and include (i) the Austrian Company Code (UGB), (ii) the Public Accountant’s Statute of Professional Practice, and (iii) laws related to financial institutions, insurance companies, and other regulated entities. Amendments to the UGB transpose the independence requirements for auditors of financial statements established in EC Directive 2006/43/EC. The Federal Ministry of Justice, which is responsible for legislation related to ethics, has started the process of transposition of the new EU Directives 2014/56/EU and EU Regulation No 537/2014. Additional detailed ethical regulations are stated in the Directive on the Practice of the Public Accounting Professions.

    The Chamber of Public Accountants and Institute of Austrian Certified Public Accountants report in their 2015 SMO Action Plan that legal requirements in Austria are equivalent, and more stringent in some cases, than the requirements of the current IESBA Code of Ethics. The 2014 version of the IESBA Code of Ethics is translated into German.

    Current Status: Adopted

  • International Public Sector Accounting Standards

    IPSASs have not been adopted in Austria, and there is no available timeline for future adoption.

    Prior to 2012, public sector accounting standards required cash-basis accounting for the preparation of financial statements. The Institute of Austrian Certified Public Accountants’ SMO Action Plan indicates that, since 2013, governmental regulations at the federal and municipal levels have been evolving to require the application of accrual basis accounting.

    KPMG Switzerland translated the 2011 version of IPSASs into German.

    Current Status: Not Adopted

  • Investigation and Discipline

    Various entities in Austria share responsibility for the investigation and discipline (I&D) of members of the profession for misconduct, breaches of professional standards, and applicable laws and regulations.

    The Public Accountants’ Statute of Professional Practice (WTBG) and the Audit Quality Assurance Act (A-QSG) stipulate that non-compliance with legal, regulatory, and professional standards may lead to disciplinary actions for members of the profession.

    In accordance with the WTBG, the Chamber of Public Accountants (KWT) is responsible for administering the I&D system for its members, which are all professional accountants. It has the authority to investigate and discipline members of the profession and can impose sanctions up to, and including, revocation of permission to practice depending on the severity of the infraction. The KWT has an established Disciplinary Commission.

    The public oversight authority, the Austrian Auditors Supervisory Authority (QKB), and the Committee for External Quality Inspections, which administers the quality assurance review system, are also responsible for the operation of an I&D system for certified professional accountants in accordance with the A-QSG.

    In addition to the I&D system of the KWT and QKB, the Institute of Austrian Certified Public Accountants has a mechanism for expulsion of members.

    Current Status: Partially Adopted

  • International Financial Reporting Standards

    All companies are required to apply Austrian Generally Accepted Accounting Principles in the preparation of individual entity financial statements in accordance with the Austrian Commercial Code. In line with the EU requirement, consolidated financial statements of companies whose securities trade in a regulated securities market are prepared in accordance with IFRSs. Austria opted to permit application of IFRSs in the consolidated accounts of all companies.

    IFRSs for SMEs have not been adopted.

    Current Status: Partially Adopted

Disclaimer

IFAC bears no responsibility for the information provided in the SMO Action Plans prepared by IFAC member organizations. Please see our full Disclaimer for additional information.

Methodology

Methodology
Last updated: 12/2015
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