Implementation of Article 41 of the 8th EU Directive in the EU member states – impact on internal governance mechanisms

Ulrich Bantleon, Alexander Bassen, Anne d'Arcy, Anja Hucke, Annette G. Kohler and Burkhard Pedell

International Journal of Corporate Governance, 2011, vol. 2, issue 2, 140-155

Abstract: In reaction to accounting scandals, national and international standard-setters have introduced and enforced additional corporate governance mechanisms in recent years. These regulatory changes have had an especially large effect on external governance mechanisms like disclosure requirements, the accountability of management and board members and statutory audits. For the first time, in Article 41 of the 8th EU Directive, European legislation addressed the relationship between audit committees (which are now mandatory for public-interest entities) and other internal governance mechanisms such as internal controls, the internal audit function, and the risk management system. This study investigates the current level of implementation of the items addressed in the 8th EU Directive within the EU member states. Implementation varies considerably from one jurisdiction to another, and there is no consensus regarding the internal audit function and other internal governance mechanisms within Europe.

Keywords: Eighth Directive; EU Directives; European Union; EC Directives; European Council; statutory audits; Europe; annual accounts; consolidated accounts; company law; audit committees; risk management; internal controls; internal audits; audit function; compliance systems; Article 41; legislation implementation; member states; internal governance; governance mechanisms; accounting scandals; national standards; international standards; regulatory changes; external governance; disclosure requirements; accountability; board members; company boards; directors; public interest; internal controls; jurisdictions; Azerbaijan; Belgium; Bulgaria; Cyprus; Czech Republic; Denmark; Estonia; France; Germany; Hungary; Lithuania; Holland; Netherlands; Poland; Spain; Turkey; UK; United Kingdom; Ireland; corporate governance. (search for similar items in EconPapers)
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijcgov:v:2:y:2011:i:2:p:140-155

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