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As part of its efforts to contribute to the harmonization of accounting practices in the EU, the Austrian Parliament enacted the Accounting Law in 1990 followed by an amendment of the Austrian Commercial Code (HGB) in 1999. While the 1990 Law incorporated the 4th and 7th EU directives on harmonization of accounting practices, the 1999 amendment of the HGB allowed all Austrian companies, listed or unlisted, to use International Financial Reporting Standards (IFRSs) in preparation of their consolidated financial statements. In 2001, the Vienna Stock Exchange made it a requirement for certain listed entities to apply IFRSs or U.S. Generally Accepted Accounting Principles (GAAP) in consolidated financial statements. However, in accordance with the European Commission (EC) Regulation No. 1606/2002, beginning 2005 all listed companies in the EU are required to use IFRSs in their consolidated accounts. The 2006 EC report on the implementation of the Regulation No. 1606/2002 confirmed that Austria requires IFRSs in the consolidated accounts of listed companies and permits IFRSs in the consolidated accounts of all other companies. IFRSs, however, are not permitted for use in the annual accounts of any type of companies. Therefore, apart from the mandatory application of IFRSs, other companies follow the HGB and financial reporting regulations specified in other laws for financial institutions, insurance companies, and investment funds. Per a 2004 European Committee of Central Balance Sheet Data Offices report on the main differences between IFRSs and national regulations, the Austrian GAAP differ from the international requirements in many respects.

Requirements for conducting audits of financial statements in Austria are contained in the Austrian Commercial Code, supplemented by recommendations issued by the Chamber of Chartered Accountants (KWT). According to the 2007 KWT self-assessment, although application of International Standards on Auditing (ISAs) is accepted, national legal requirements take precedence. However, in instances where no national guidance exists, ISAs have to be applied. There is insufficient publicly available information on whether the national regulations conform to or differ from the international standards. Austrian auditing practices, however, are likely to change due to the enactment of Directive 2006/43/EC of the European Parliament and the Council, which came into force in May 2006. Per this directive, all statutory audits of annual and consolidated accounts in EU countries are required to be conducted on the basis of ISAs as adopted by the European Commission. EU member states shall adopt and publish the provisions necessary to comply with this Directive before June 29, 2008. Member states may impose additional requirements relating to the statuary audits of annual and consolidated accounts for periods expiring on June 29, 2010.