The Audit Committee News is a quarterly publication, exclusively in electronic format since 2013, which informs you about all of the latest trends in its core focus areas of corporate governance, risk management & compliance and corporate reporting. The AC News features articles penned by experts from Switzerland and many other countries around the world.
Dear Board members,
In Switzerland, at least, there is no corporate legislation governing the legal structure and functioning of corporate groups. Even though groups are commercially viewed to constitute uniformly managed companies, they operate outside their actual legal structure. As a result, court decisions determine to what extent a parent company can be made liable for its subsidiaries’ activities. Jörg Kilchmann concludes that, in practice, a corporate group’s confidence liability is only applied in exceptional cases.
On the other hand, frequent attempts are made to require corporate groups to take on more responsibility. The most recent example is the Responsible Business Initiative aimed at regulating the human rights and environmental requirements of corporate groups. Gabriel Meier gives you an overview on the initiative’s content, while Erich Herzog and Thomas Pletscher explain economiesuisse’s take on this topic.
In view of increasing regulation outside of the financial sector, many companies are now forced to rethink the structure of their compliance function. Solveign Rufenacht discusses the different models and material aspects to be taken into account.
In terms of governance, we address the interaction between Audit Committee and audit firm. Taking a look from a practical perspective, François Rouiller sheds some light on the audit tender process to show which elements of the process are key to making a sound decision.
Under the heading financial reporting, Stefan Sieber examines the handling of company-specific key figures and which rules of play must be observed in order to maintain objectivity and comparability. And finally, Prof. Dr. Peter Leibfried explains how the Swiss GAAP FER reacts to the new rules of IFRS and US GAAP on revenue recognition.
We wish you an interesting read!
Philipp Hallauer and Hélène Béguin
Swiss legislation only selectively touches upon group-related matters. As a consequence, the law of groups is strongly shaped by court decisions. In his article Jörg Kilchmann explains whether and if, under what conditions a parent company may be made liable for its subsidiary’s liabilities.
Read more: Article by Jörg Kilchmann (in German)
The initiative “for protecting human rights and the environment” (Responsible Business Initiative) aims at establishing legally binding due diligence obligations for companies regarding human rights and the environment. Gabriel Meier presents an overview on the initiative’s context and its impact direction.
Read more: Article by Gabriel Meier (in German)
Afterwards, Erich Herzog and Thomas Pletscher will explain economiesuisse’s take on the initiative.
Even outside of the financial sector, the burgeoning regulation poses major challenges to companies. It is therefore imperative to define the “right” organizational setup for the Compliance function of the future.
The twelfth extract from the Audit Committee Handbook is dedicated to the external audit. Thereby, the focus is laid on maintaining an effective relationship between the Audit Committee and the external auditor.
The Audit Committee plays a key role in tendering the audit mandate. A professionally organized audit tender process facilitates a sound decision that focuses on safeguarding shareholders’ and creditors’ legitimate interests.
Read more: Article by François Rouiller (in German)
In this issue on “World of Corporate Governance” we introduce the Netherlands.
Read more: Article by ACI Germany (in German)
More often than not, the key performance indicators defined by the relevant accounting standards do not tell the whole story. For this reason many companies use additional, so-called “non-GAAP” KPIs to illustrate their performance. In doing so, certain minimum requirements should be met to ensure the objectivity and comparability of such figures.
Revenue hast become an increasingly important KPI of corporate performance. IFRS and US GAAP have recently revised their provisions in this regard substantially. The Swiss GAAP FER have revised their principles on revenue recognition as well as at 1 January 2016.
Read more: Article by Prof. Dr. Peter Leibfried (in German)
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