On 05 March 2024 a public consultation was opened on a draft amendment to the Accountancy Act. The draft law aims to implement two European Directives into national law: (i) Directive (EU) 2022/2464 of the European Parliament (the so-called CSRD Directive or ESG-reporting) and (ii) Commission Delegated Directive (EU) 2023/2775 of 17 October 2023.

The changes are focused on strengthening the transparency of business entities and their commitment to environmental protection and human rights.

This concept is in line with the European policy in relation to the so-called "European Green Pact" or "Green Deal".

The enterprises should report not only on material  and financial performance, but also on the actions and measures taken with regard to sustainability, which gives potential investors more aggregated information on possible risks as well as on the efficient use of natural and social resources. The sustainability report should contain non-financial information related to the impact of a specific company on environmental processes, social rights and governance issues.

Who are the obliged companies?

The new obligations will arise for the 2024 accounting year only in respect of large public-interest enterprises and parent enterprises that have more than 500 employees as of 31 December. For all other categories of enterprises, this obligation will arise in stages in the following accounting years until 2028.

The governing bodies of the company should elaborate a sustainability report to be published in the Commercial Register. Such report will be drawn up by the large enterprises and so-called public interest enterprises (small and medium-sized enterprises whose transferable securities are admitted to trading on a regulated market in EU Member State), as well as by parent enterprises of large groups of companies.

The draft law requires sustainability reports to be audited by registered auditors within the meaning of the Independent Financial Audit Act, resulting in issuing an audit opinion on the report. However, at this stage, no further training or retraining is provided in relation to these amendments. Registered auditors are mostly persons with financial background, which raises the question whether the State could not provide these functions to professionals already concentrated in this field. Similar amendments are not foreseen at this stage in the Independent Financial Audit Act, which leaves room for discussion and further deliberation so that the changes not only formally meet the requirements of the Directives but also achieve the European policy objectives in this respect.

The envisaged legislative changes introduce an additional administrative burden for companies, around which there is much uncertainty at this stage. At the same time, they are an expression of the desire to strengthen the social responsibility of companies in the EU and aim to lay the foundations for a sustainable economy and efficient use of resources, environmental protection and respect for social rights.

‍