Running an Audit in Germany

Accounting and auditing standards in Germany

According to the German Commercial Code, companies are required to prepare their financial statements within three months (six months for small companies) and to publish them within 12 months following the close of the financial year. The financial statements must be submitted by the management board of the German company with the consent of the supervisory board. The financial statements must be audited by an independent auditor, according to Section 316 I in the Commercial Law. Also, all financial records must be approved by the company’s shareholders.

Audit requirements depending on the type of German company

The Commercial Law establishes different requirements for each type of German company. Statutory audits are not a requirement for small companies in Germany, for example. On the other hand, medium sized companies are required to file the following audited documents with the Company Register (Unternehmensregister):

• – the balance sheet,
• – the income statements,
• – a management report,
• – notes to the financial statements (Anhang).

Simplified filing procedures are also available for certain types of companies. For details about simplified audit requirements you may ask our German attorneys.

German stock corporations are required to file their financial statements with the Company Register (Unternehmensregister) before the end of the 12th month following the end of the financial year, according to the Commercial Code (Section 325 HGB). Also, large stock corporations’ audited accounts will be published in the Company Register (Unternehmensregister), which replaced the Federal Gazette for financial years starting after 31 December 2021.

The electronic tax audit in Germany

The German tax authorities have enabled a new legislation with respect to tax audits in 2002. The new rules, known as GDPdU (since replaced by the GoBD), allows tax authorities to collect data about tax audits in electronic format. Both the Tax Procedures Act and the German Value Added Tax Act have been amended in order to correspond with the new electronic tax audit legislation.

According to the new legislation, the tax authorities may access the electronic data as it follows:

• – onsite, by accessing the taxpayers’ computers,
• – indirect access, by requiring the taxpayers to select the data to be submitted with the tax auditors,
• – by submitting CDs with the relevant tax information with the German Revenue Service.

The German company will also be required to assist the tax authorities in conducting the e-audit.

You may contact our lawyers for details about available audit services in Germany.