Business law and corporate governance
What this domain tests
Your command of the Civil Code (Act No. 89/2012 Coll.), the Business Corporations Act (Act No. 90/2012 Coll., ZOK) and the governance expectations that attach to audited entities - who appoints the auditor, who is liable, and what the auditor must verify in corporate transactions.
Core rules
- Company forms: v.o.s., k.s., s.r.o., a.s. The general meeting appoints the statutory auditor; in an a.s. this cannot be delegated to the board.
- Directors owe a duty of care and loyalty (§ 159 Civil Code) and are liable for damage caused by breach; the business judgement rule protects informed, disinterested decisions.
- Related-party contracts require approval under § 54–55 ZOK; failure exposes the parties to liability and shapes the auditor's related-party work under ISA 550.
- Audit committee: public-interest entities and entities meeting the thresholds in § 44a of the Accounting Act must establish one; it recommends the auditor, monitors independence and reviews the audit.
- Transformations under Act No. 125/2008 Coll. (merger, spin-off, change of form) require draft terms, a valuation and, usually, an expert opinion; a statutory auditor often acts as the reviewing expert.
- The Corporate Governance Code 2018, based on the OECD Principles, applies on a comply-or-explain basis to listed companies.
Worked example
Parent a.s. merges its wholly owned subsidiary into itself. The subsidiary's net assets are valued at CZK 210m at the decisive date, but the valuation uses a property yield that ignores a signed lease at half the market rent. The auditor must check consistency between the valuation, the draft terms and the accounts at the decisive date, and flag the lease in the report on the transformation. Reasoning: the share capital increase must be covered by real, documented net assets - a headline valuation is not evidence.
Traps
Assuming the supervisory board appoints the auditor; ignoring the audit committee's mandatory recommendation; treating the corporate governance code as binding statute; forgetting that transformation documents must be filed in the Commercial Register collection of documents; overlooking the decisive date when testing the accounts.