The ‘open society’ of accounting law actors

The responsibility for the accuracy and reliability of the annual and consolidated acounts of a company has for a long time rested with the members of the board of directors (in some countries also with the members of the supervisory board) and with the auditors who are educated and mandated to scrutinize the financial reports drawn up by the company itself and to testify as to its accordance with the relevant rules and principles under accounting law. This responsibility has been strengthened in recent European legislation. On the one hand, the establishment of an ‘audit committee’ being part of the company board is held to be necessary for ‘public-interest entities’ such as listed companies; on the other hand, the standards of auditing for public accountants have been increased by a recently enacted directive, including new levels of public oversight devoted to their work.

Nevertheless, there are additional actors present in the world of accounting. First of all, there are the standard setters as such. In the old days, these used to be national legislators or other national bodies; over time, starting with the directive on annual accounts in 1978, the European Institutions joined this group. Accounting rules were codified during the 1980s in most European countries. This ‘legalization’ of accounting practice led to an increased scrutiny by the courts.