Nov. 9 (Bloomberg) -- Austria’s financial watchdog will be empowered to regulate accounting practices and financial reports under a government proposal to bring the country into compliance with an eight-year-old European Union law.
The Finanzmarktaufsicht, known as the FMA, will gain the authority to check auditing practices and financial reports under a law proposed today, the Finance Ministry said. It covers companies with shares or bonds traded on Austrian public markets.
“Investors’ trust in the integrity and stability of the entire market has been shattered by corporate scandals at home and abroad in recent years,” the ministry said in the proposal. “The predominant goal is the supervision of financial reporting of capital market-oriented companies.”
Austria has bailed out three banks since 2008, and prosecutors are investigating whether false accounting played a role. Retail investors have also suffered losses in real estate companies whose financial problems may have been hidden from investors.
No authority in Austria currently has the power to review company accounts. The FMA oversees banking, insurance, pension saving and securities trading. The only way to put companies to a test is to report suspicions to state prosecutors who might then investigate whether there were accounting problems.
The proposed law will go before parliament for consideration next.
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