On May 26th 2012 new EU legislation came into affect. This will require all website owners (including sites that are not based in EU, but can be accessed from it) to clearly display the cookies the site is using. Sites that fail to comply with this can face fines of up to £500,000.
A cookie audit is the first step towards complying with the new laws. The audit is designed to identify the cookies that your site uses and the reasons. The new laws allow for a exemption from declaration, these are cookies that are needed for the sites operation. These include cookies used for logins or shopping cart functions. However, tracking cookies, like the cookies used by Google Analytics or Omniture are not classed within this category and must be declared.
Both the GDPR and the ePrivacy regulations are expected to affect this requirement. You can read more about the GDPR and ePrivacy here.