The Audit Committee in the EU Emerging Countries

Market globalisation has caused significant changes in rules, recommendations and corporate governance practices. For the continuous improvement of corporate governance in the European countries, the audit committee has a key role in stakeholder protection (Dir. 2006/43/CE). The chapter aims at analysing the rules concerning the audit committee in the newly industrialised European countries: Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia. The economic development of these countries is primarily based on the ability to attract foreign capital, by assuring correctness and effectiveness in decision-making processes and guaranteeing investors' and stakeholders' protection. In this context the audit committee contributes to adopt, maintain and strengthen equitable governance systems, in accordance with the international standards of best practices. Through a comparative analysis of the most recent corporate governance codes, we found that rules regarding the audit committee in the newly industrialised countries are very similar, converging towards those adopted in the old industrialised ones. Nevertheless, the qualifications of the committee members need to be reinforced to make the audit committee???s activity really effective within the company's internal control system.