German audit office for accounting

from Wikipedia, the free encyclopedia
Club logo

The German Audit Office for Accounting DPR e. V. (abbreviated: DPR ) is an institution established in 2005 to monitor the accounting of capital market-oriented companies in Germany on behalf of the state. It is based in Berlin . Internationally, the FREP appears under the English name of the Financial Reporting Enforcement Panel ( FREP ). In journalistic texts it is also referred to as the “accounting police”, but it has no sovereign powers and is organized as an association under private law .

tasks

The facility started its work on July 1, 2005. The reason for the establishment of the German Audit Office for Accounting was the public criticism of the lack of audit structures in connection with the accounting scandals of previous years ( e.g. Flowtex , Comroad ). Their tasks are described in Sections 342b to 342e of the German Commercial Code and consist in monitoring the accounting of capital market-oriented companies.

The annual financial statements and annual reports of companies whose securities are admitted to trading on an official or regulated market on a domestic stock exchange within the meaning of Section 2 (1) sentence 1 of the Securities Trading Act are audited .

The inspection body checks whether the most recently approved annual financial statements and the associated management report , or the most recently approved consolidated financial statements and the associated group management report of a company in the above sense, comply with statutory provisions, including the principles of proper accounting (GoB) or other accounting standards ( IFRS , Commercial Code) .

The inspection body not only acts in the event of specific indications of a violation of the accounting regulations, but also has to check the financial statements of the corresponding companies on a random basis without any particular reason.

The legal basis for the work of the FREP are §§ 342b ff. HGB, which were inserted into the HGB by the Accounting Control Act and came into force on December 21, 2004. Testing by a recognized testing within the meaning of § 342b found under para. 1 HGB Art. 56 EGHGB from 1 July 2005.. In a survey carried out by the auditing industry on the 5-year existence of the test center, the majority of the large companies surveyed said they were satisfied with the testing practices of the FREP, but wanted an even faster process that was more resource-efficient for customers.

In principle, the corporations work with the inspection agency on a voluntary basis. However, if a stock corporation refuses to agree to this review, the Federal Financial Supervisory Authority (Bafin) will take action. The Bafin is entitled to enforce a balance sheet review with compulsory measures and to correct any errors in the balance sheet ( §§ 106 ff. Securities Trading Act). However, the Bafin cannot act independently, even in suspicious cases, but is legally obliged to involve the FREP. Due to insufficient staff (according to FAZ information, for example, in the 16 months prior to the discovery of the fraud case, essentially only one employee was entrusted with the Wirecard case), the examinations were very protracted and made it impossible for the state bodies to intervene quickly.

The FREP has 15 employees and an annual budget of 6 million euros. The FREP conducts between 130 and 140 company audits each year. An examination takes an average of three to six months, during which two to four questions from the FREP have to be answered.

Members

The association was founded on May 14, 2004 by 15 professional and interest groups and entered in the register of associations at the Charlottenburg District Court on September 10, 2004 . Today it has 17 members. Membership is limited to the group of professional and interest groups of accountants and accountant users.

Founding members

Members who joined later

Functionaries

Herbert Meyer, CFO of Heidelberger Druckmaschinen AG , has been president of the DPR since it was founded . He has been succeeded by Edgar Ernst, the former CFO of Deutsche Post AG , since 2011 . The former RWE CFO Rolf Pohlig has been the chairman of the board of the sponsoring association since 2016 ; The founding chairman and Pohlig's predecessor was Werner Brandt , CFO of the software company SAP .

financing

Financing is based on an allocation, with minimum and maximum amounts being set. The surcharge is based on the stock exchange turnover of the person subject to the surcharge in relation to all those subject to surcharge. Companies with securities traded on a German market are subject to a levy.

Termination of contract

The Federal Financial Supervisory Authority (BaFin) gave the FREP an inspection order in February 2019 due to inconsistencies in the 2018 half-year balance sheet of the DAX company Wirecard . The complex test took a long time, among other things because essentially only one employee was entrusted with it for 16 months. After this failure in the scandal of fraudulent balance sheets of the insolvent group, the federal government announced at the end of June 2020 that it would end its cooperation with the association; the remaining term of the contract is 18 months.

Web links

Individual evidence

  1. ↑ a b Federal government wants to terminate contract with “accounting police”. In: Frkf. General Currently , June 28, 2020, accessed on the same day.
  2. ↑ Trust is good, control is better. In: boerse.ard.de , June 20, 2017, accessed on June 28, 2020.
  3. ↑ BGBl. 2004 I p. 3408 (PDF)
  4. ↑ a b Companies give FREP examiners good marks ( Memento from August 13, 2014 in the Internet Archive ). PricewaterhouseCoopers , as of 2010.
  5. ^ A b Marcus Theurer: Financial supervision delayed Wirecard balance sheet audit. In: Frkf. General Currently , June 27, 2020, accessed on June 28, 2020.
  6. ↑ Georg Gietsberg: The “ accounting police ” sees itself as a pawn. In: Frkf. General Currently , June 28, 2020, accessed on the same day.
  7. ↑ dpa report Federal government terminates contract with auditors , General-Anzeiger Bonn, June 29, 2020, p. 8