As indicated yesterday, recommendation 13.1 of the review group on auditing suggests that boards of directors of public limited companies, financial institutions and public interest companies should be required by legislation to establish audit committees, the membership of which should be made up of non-executive directors. The Bill imposes a mandatory obligation on public limited companies to establish audit committees. The requirement only applies to private companies above a balance sheet threshold of €25 million and a turnover exceeding €50 million and it is not mandatory. The board of such a company can decide not to establish an audit committee and only needs to explain why it has so decided.