Balance sheet falsification
As false accounting and balance sheet manipulation that deliberately or recklessly false playback is called the position of a company's balance sheet . According to German criminal law, these are criminal offenses. They are a form of economic crime .
The targeted modification of balance sheets with the aim of falsifying them is colloquially referred to as "fudging" the balance sheet.
Criminal offenses in Germany
According to Section 331 No. 1 of the Commercial Code (HGB) as a norm of ancillary criminal law, anyone who, as a member of the body authorized to represent or the supervisory board of a corporation , incorrectly reproduces or conceals the relationships of the corporation in the opening balance sheet , in the annual financial statements or in the management report . Acts of this kind can result in imprisonment of up to three years or fines.
An incorrect reproduction is given if the representation of the situation does not match reality. Balance sheet falsification and balance sheet concealment come into consideration.
A balance sheet falsification is an arbitrary increase or decrease in individual balance sheet items in the sense of incorrect valuations. A criminal liability is only given if the evaluations are absolutely no longer justifiable, i.e. the inaccuracy is beyond doubt, i.e. is evident, and the presentation is therefore unjustifiable. Examples of balance sheet falsification are:
- Identification of dubious outstanding debts at their nominal value,
- Setting fictitious amounts,
- Pre-activation of future purchase price claims before transfer of ownership of the goods that have also been activated,
- Omission of individual balance sheet items,
- arbitrary over- and undervaluation.
A balance sheet is obscured if facts are presented so indistinctly or unrecognizable that the actual facts can only be recognized with difficulty or not at all. Examples for this are:
- False names: By this is subsumed under other when changing balances are recorded in the securities account effects as accounts receivable are designated or receivables are listed under the item cash.
- Offsetting of receivables and liabilities.
- Disregard of the classification rules.
In addition to the criminal liability of balance sheet falsification according to the Commercial Code, a balance sheet falsification can also be punished as a bankruptcy offense according to the Criminal Code (see § § 283 ff. StGB). A punishment is only possible if the person responsible for bookkeeping and accounting has stopped his payments or insolvency proceedings have been opened against his assets or have been rejected for lack of assets ( Section 283 (6) StGB).
International examples of balance sheet manipulation
A well-known case was the Vogtland machine factory in Plauen in the 1930s .
The energy company Enron was one of the largest corporations in the United States. In 2001 it caused one of the largest corporate scandals that the US economy had ever experienced due to continued falsification of the balance sheet.
In November 2011, the Japanese camera manufacturer Olympus announced that it had falsified its accounts on a large scale in the course of a financial scandal. Since the 1990s, losses through investment businesses have been masked with the help of overpriced company acquisitions and excessive consultancy fees.
In June 2020, auditors refused the German payment service provider Wirecard to certify the balance sheet due to a lack of evidence. Thereupon and because of other inconsistencies, the public prosecutor's office investigated the board members on suspicion of falsification of accounts and market manipulation. An arrest warrant was issued against the resigned CEO Markus Braun .
Individual evidence
- ↑ Oliver Budzinski, Jörg Jasper, Jörg Jasper, Albrecht F. Michler: Definition of »Frieren der Bilanz«. In : wirtschaftslexikon.gabler.de. Retrieved January 9, 2017 .
- ↑ Fake balance sheets: Olympus threatens to be excluded from the stock exchange. In: Spiegel Online . November 8, 2011, accessed January 14, 2017 .
- ↑ Frankfurter Allgemeine Zeitung (ed.): Extended advertisement from Bafin: Customers turn away from Wirecard . June 24, 2020, ISSN 0174-4909 ( faz.net [accessed June 24, 2020]).
