The upcoming draft law No. 8286 in Luxembourg is expected to drastically alter the country’s regulatory landscape by eliminating the need for statutory auditors (“Commissaire aux comptes”) for public limited companies (“Société Anonyme” / “S.A.”). Commissaire aux comptes in Luxembourg refers to an internal auditor and does not have the same legal representation as a Statutory Auditor. Under the current Luxembourg law, internal auditors do not need to have a specific qualification to hold this mandate. In fact, the internal auditors are generally either one of the directors, shareholders or employees of the company or a person close to the shareholders. This developing initiative reflects the government’s engagement to fostering a more agile and competitive business environment while maintaining stringent financial standards.

Essentially, draft law No. 8286 recognizes the need for modernization in response to changing economic realities and aims to expedite compliance processes and minimize administrative costs for S.A.s. The goal of Luxembourg’s removal of the statutory auditor mandate is to enable companies to deploy resources more effectively, spurring innovation and promoting growth.

The new law’s proponents highlight how it would make Luxembourg a more desirable location for company growth and investment, establishing the nation as a leader in innovative regulation. They argue that instead of undermining financial openness by doing away with statutory auditor obligations, substituting assurance systems and strengthening disclosure standards will promote accountability.

Sceptics, however, warn against the possible dangers of less monitoring, highlighting the necessity of strong internal controls and corporate governance frameworks as defences against fraud and misconduct.

As draft law No. 8286 progresses through the legislative path, stakeholders closely monitor its implications for the accounting legal framework and its impact on the competitiveness and integrity of Luxembourg’s business ecosystem.

Magali Micheletti, Partner Auren Luxembourg