A new provision in the Act on Public Offers (Ustawy o Ofercie Publicznej) has introduced a new obligation on Polish PIEs to prepare an annual report on the remuneration of the management board and supervisory board and to submit this report to the auditor’s assessment.
Art. 90g of the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organized Trading, and Public Companies” introduces the new Remuneration Report. The supervisory board of a public company must prepare a report on the remuneration of the management board and the supervisory board each year. The scope of the report is specified in the provision cited above. The report has to be “assessed” by a statutory auditor to ensure that the information it contains is accurate and complete.
The first such annual Remuneration Report will be prepared jointly for the years 2019-2020 and the audits of them will be carried out for the first time in 2021.
The Remuneration Report will be prepared separately from the financial statements and the company’s annual report, and its “assessment” will be classified technically as “an assurance service, other than an audit of the financial statements”, and considered by the Regulator as part of the auditing business of a licensed firm. Only registered auditors and their companies licensed to audit Public Interest Entities should be engaged to perform these assurance services. The purpose of the auditor’s assessment is to confirm that the remuneration report contains all the elements required by law. Responsibility for the substantive correctness of the information indicated in the remuneration report rests solely with the members of the company’s supervisory board, and the auditor should be independent to the entity. It may indeed be the same auditor which carries out the audit of the Financial Statements, according to Art. 136 paragraph. 1 of the Act on Statutory Auditors, therefore in most cases it will be the same auditor which you already have.
The above has been confirmed by the Financial Market Development Department at the Ministry of Finance in response to a query by the Chamber of Auditors in Poland (PIBR).
Should you be in a situation where your financial statements auditor is reluctant to carry out this review, they are not obliged to as it is separate to the existing contracts in place currently. You may prefer, for the sake of good corporate governance, to engage a smaller Firm which is able to carry out PIE audits for this task. Please contact us and we will assist you to a good offer from a reputable Firm for the audit, or alternatively if you would like help with the report itself, this ca also be done with Quoracy Consulting and our partners.
For further help, please use the contact form below. It emails direct to me at the audit firm Grupa Strategia, which has been developing a competence in this area in anticipation of the changes.