Oecd legal Instruments

IV.D. 
External auditors should be accountable to the shareholders and owe a duty to the company 
to exercise due professional care in the conduct of the audit in the public interest. 
The practice that external auditors are recommended by an independent audit committee of the board or an 
equivalent body and are elected, appointed or approved either by that committee/body or by the 
shareholders’ meeting directly can be regarded as good practice since it clarifies that the external auditor 
should be accountable to the shareholders. It also underlines that the external auditor owes a duty of 
professional care to the company rather than any individual or group of corporate managers that they may 
interact with for the purpose of their work. This practice, however, should not be seen as precluding other 
bodies such as the audit committee from making such appointments. To enhance accountability to 
shareholders, shareholders should have the possibility to communicate directly with the audit committee or 
an equivalent body regarding its oversight of the external auditor, for example by disclosures, including of 
the methodology for assessing the auditor’s performance, or by participation of the audit committee or 
external auditor in shareholder meetings. 
IV.E. 
Channels for disseminating information should provide for equal, timely and cost-efficient 
access to relevant information by users. 
Channels for the dissemination of information can be as important as the content of the information itself. 
While the disclosure of information is often provided for by legislation, filing and access to information can 
be cumbersome and costly. Filing of statutory reports has been greatly enhanced in some jurisdictions by 
electronic filing and data retrieval systems. Jurisdictions should move to the next stage by integrating 
different sources of company information, including shareholder filings. Easily accessible and user friendly 
OECD/LEGAL/0413
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company websites also provide the opportunity for improving information dissemination, and most 
jurisdictions now require or recommend companies to have a website that provides relevant and significant 
information about the company itself. 
Provisions for ongoing disclosure which includes periodic disclosure and continuous or current disclosure 
which must be provided on an ad hoc basis should be required. With respect to continuous/current 
disclosure, good practice is to call for “immediate” disclosure of material developments, whether this means 
“as soon as possible” or is defined as a prescribed maximum number of specified days. The IOSCO 
Principles for Periodic Disclosure by Listed Entities set guidance for the periodic reports of companies that 
have securities listed or admitted to trading on a regulated market in which retail investors participate. The 
IOSCO Principles for Ongoing Disclosure and Material Development Reporting by Listed Entities set forth 
common principles of ongoing disclosure and material development reporting for listed companies.