A successful audit of annual financial statements requires a thorough understanding of our clients’ internal processes. We look closely into all areas of the company and use innovative, IT-supported tools for the audit of annual and consolidated financial statements in accordance with the German Commercial Code (HGB) or international accounting standards. Our range of services comprises a wide variety of special audits, the key objective of our approach being to provide you with valuable input for your company’s successful development that aligns with your goals. We see ourselves both as a sparring partner and as a font of ideas.
We follow a business process-oriented audit approach that is individually tailored to the company and is not focused on accounting alone. Instead, the main focus is always on your unique business model. We take a look at the entire value chain, including the whole commercial environment. Our customised audit strategy is largely determined by your particular economic goals.
The internal sharing of views on current audit issues (“four-eyes principle”) is just as much an integral part of our communication culture as the close interaction with our clients. As we see it, quality assurance is a continual process. While obviously highly important, formal correctness is not the only criterion; also important is your satisfaction with our advisory services.
Range of services
The standards for both the preparation and the audit of annual financial statements have risen continuously in recent years.
As a competent partner for companies in all audit matters, we have worked steadily to develop the organisation and procedures relating to annual audits.
- As part of the statutory or voluntary “classical” audit of annual financial statements, we also examine both the effectiveness and appropriateness of the internal control system as well as the risk management system and the organisational efficiency and correctness of business procedures.
- We pass on suggestions for process improvements to our clients.
- Our expertise also extends to the review of (interim) financial statements and audits within the meaning of Section 53 of the German Budget Principles Act (HGrG), including the compliance review of the management.
- Our case-specific, risk-oriented audit approach is based on German principles of proper bookkeeping and balance-sheet makeup or on the International Standards on Auditing, having due regard to the client’s interest in obtaining an optimal and efficient audit.
- In statutory and voluntary annual audits, we naturally take account of the specifics of each sector and legal form.
Growing internationalisation is accelerating the integration of the capital markets. The comparability of the annual and consolidated financial statements of companies operating on the capital market is thus gaining in importance. This in turn means that international accounting standards such as IFRS and US-GAAP are also gaining in importance. In the EU, capital market-oriented parent companies are already obliged to prepare their consolidated financial statements in line with IFRS.
- Our expertise is not confined to converting your accounting to international accounting standards, we also audit IFRS and US GAAP financial statements.
- We conduct our audits in accordance with the International Standards on Auditing and United States Generally Accepted Auditing Standards.
- Our extensive know-how enables us to reliably assess complex issues according to IFRS or US-GAAP, for example with regard to the accounting of stock options and financial derivatives.
- When auditing IFRS and US GAAP financial statements, we naturally take into account the specifics of the respective sector and legal form.
Both the preparation and the auditing of consolidated financial statements involve complex challenges – always depending on the individual structure of the particular group of companies.
Our experience in auditing group structures – ranging from single-tier parent-subsidiary structures in Germany to multinational corporate groups worldwide – is as diverse as our clients’ requirements.
We conduct statutory audits of consolidated financial statements in accordance with the German Commercial Code (HGB), the German Disclosure Act (Publizitätsgesetz) and international standards – naturally taking into account the specifics of the relevant industries and legal forms.
In addition, we conduct voluntary audits of consolidated financial statements – regardless of whether these are conducted for external purposes such as structural or financing measures, serve internal information purposes or are part of a publicity strategy within the corporate group.
We also review group reporting prepared for specific purposes on behalf of our clients.
In addition to conducting audits, we support companies in drawing up consolidated financial statements, in group-wide reporting or in developing consolidation tools, etc.
On the basis of legal requirements, we consider the effectiveness and adequacy of the internal control system, the risk management system as well as the organisational efficiency and the regularity of business processes across an entire group of companies, and provide guidance on possible ways to optimise these.
Our customised, risk-oriented audit approach is based on the German principles of proper auditing and international auditing standards, taking into account the best and most efficient audit procedure in our client’s interests.
As auditors of consolidated financial statements, we work efficiently with sub-area auditors at national and international level and also conduct sub-area audits of domestic companies ourselves for higher-level group structures.
- If required, competent colleagues are available to us as contacts worldwide via our Crowe Global network.
Companies face the challenge of minimising various risks in connection with their internal business activities. Rules and regulations for employees can only partially prevent these. For example, an internal control system and monitoring system are required in order to manage processes in finance as smoothly as possible. An internal control system (ICS) consists of both preventive and detective controls, most of which can be carried out on the system side within the IT framework.
As a first step, we analyse the current state of your business processes, create an awareness among your employees of any weaknesses with the help of a risk-control matrix and then implement an ICS in cooperation with you, taking into account ISA [DE] 330, which can ensure secure and smoother processes.
When setting up a public limited company on the basis of non-cash contributions or asset acquisition, a formation audit by a court-appointed formation auditor is mandatory. This includes a description and assessment of the formation procedure as well as a valuation of non-cash contributions and asset acquisition.
- We are a competent partner for the formation audit.
- Upon request, we also carry out comprehensive audits on formation procedures that are not based on a statutory obligation.
- As part of these audits, we closely examine both the economic factors and the legal issues surrounding the formation of the company.
- We help you to realise your particular objectives in the best possible way while still at the formation stage.
- During the formation audit, we naturally take into account the specifics of each sector and legal form.
In the case of special audits under stock corporation law, potential items requiring scrutiny include both the general special audit pursuant to Section 142 ff. German Stock Corporation Act (AktG) relating to actions taken and events occurring at the company’s formation or occurring in the course of the management of the company’s affairs as well as the special audit in connection with inadmissible undervaluation or the special audit of the relationships with controlling companies. All of these items require an audit of specific business segments, transactions or annual financial statement items and are usually justified by claims of stakeholder groups or the company itself.
- In special audits under stock corporation law, we act on behalf of the company to be audited or on the basis of a judicial appointment.
- Due to our wide expertise in accounting, valuation and legal issues, we are a competent partner in all of these areas.
- Thanks to our solution-oriented and targeted approach, we ensure that reporting and audits are carried out efficiently and to a high standard.
- In special audits under stock corporation law, we naturally take into account the specifics of each sector and legal form.
All auditors and auditing firms that perform statutory audits of financial statements pursuant to Section 316 HGB are generally required to undergo a quality control review by another member of the profession (peer review). The aim of this quality control is to ensure and improve the quality of professional practice and to strengthen public confidence in the work of the auditor.
- Kleeberg is available as a competent partner to auditors and auditing companies having a peer review carried out.
- As part of our audit, we assess the adequacy and function of the quality assurance system of the respective auditing firm.
- We report on the results of our audit to the extent customary in the profession.
- Our employees have years of experience in the field of quality control. This extends both to large and medium-sized audit firms as well as to small and medium-sized practices, whose organisational challenges we know and understand.
- There are just as few local restrictions for quality control inspections as there are for the rest of our range of services; our activities are not limited to Munich – we are a competent partner throughout the region.
- In addition to quality control audits, we offer our colleagues in the profession further quality assurance services. In addition to professional assessments and expert reports, we provide ISO certifications as well as prepare report critiques and internal reviews.
Restructuring processes within companies or business associations often require transformation measures. Depending on the legal entities involved, this can mean that merger audits, formation audits or audits of non-cash contributions will become necessary. At the centre of the merger audit is the audit of the merger agreement to ensure that the mandatory disclosures are complete and correct in accordance with the requirements of the Transformation Act.
- We can advise you not only on restructuring processes but can also take charge of transformation and merger audits.
- In these cases, we carry out a detailed analysis of the economic and legal procedures and their implications.
- Through our expertise we ensure that audits are carried out comprehensively and efficiently and thus contribute to a successful restructuring.
- In transformation and merger audits, we naturally take into account the specifics of each sector and legal form.
The licensing regulation in Section 34c of the German Industrial Code (GewO) is intended to ensure the reliability and orderly financial circumstances of certain business people. This is the basis for the Real Estate Agents and Property Developers Ordinance (MaBV) which regulates the performance of activities by real estate agents, loan and investment brokers, property developers and construction supervisors.
- For clients from these professional groups, we are a competent partner for the mandatory annual compliance audit.
- We comprehensively analyse the nature of the transactions conducted and structure our audit procedures so as to ensure full compliance with all relevant provisions.
- The efficiency of our audit services ensures that our clients are able discharge their obligations to the relevant authority completely and on time, permitting them to refocus their attention on their operational activities as quickly as possible.
- When performing audits in accordance with MaBV, we naturally take into account the specifics of each sector and legal form.
Every businessman who holds a licence pursuant to Section 34f of the German Industrial Code (GewO) or Section 34h GewO must, pursuant to Section 24 of the German Financial Investment Brokerage Ordinance (FinVermV), have an audit report prepared by a suitable auditor for each calendar year and submit the report in the original to the competent licensing authority by 31 December of the following year at the latest.
For exclusive agents of distribution companies, there is the option of submitting a system audit report instead of an individual audit report. This requires that the distribution company ensures compliance with the professional duties pursuant to Sections 12 to 23 FinVermV by the affiliated intermediaries using an appropriate and effective control system (ICS) and, moreover, an additional declaration is submitted by the intermediaries confirming that they only worked for the audited distribution company during the audit period.
In addition, it must be ensured by a principle of rotation that every businessman submits an individual audit report pursuant to Section 24 (1) sentence 1 FinVermV at least every four years.
The system audit report may only be prepared by an auditor within the meaning of Section 24 (3) FinVermV (e.g. a public accountant).
In addition to general auditing regulations, the German Banking Act (KWG) contains special auditing regulations for credit institutions, for example a comprehensive audit of the financial circumstances as well as compliance with certain additional regulations and special laws. For securities services companies, the German Securities Trading Act (WpHG) prescribes additional audits.
- Kleeberg is a competent partner for clients who are subject to these regulations.
- We take over the general audit and also ensure fulfilment of the specific audit requirements.
- On behalf of the client, we check compliance with the reporting obligations, the codes of conduct and the disclosure requirements of the WpHG as well as compliance with all supervisory regulations and guidelines.
- As part of our auditing activities, we carefully analyse the individual risk factors for the client. This not only improves the efficiency and effectiveness of our audit, but also advances the client’s economic perspectives.
- In audits governed by the KWG and WpHG, we naturally take into account the specifics of each sector and legal form.
With certain enterprises or institutions, it may be necessary to investigate whether the business is being conducted in a proper and orderly manner.
If a regional or local authority owns the majority of the shares of an enterprise organised under private law or if it owns at least the fourth part of the shares and if it is entitled to the majority of the shares together with other regional or local authorities, the competent executive body of the enterprise must, at the request of the said authority/authorities, commission the auditors to extend the audit of the annual financial statements pursuant to Section 53 of the German Budgetary Principles Act (HGrG). For this purpose, the audit of the annual financial statements must also include an examination of whether the business is being conducted in a proper and orderly manner and give an account of the financial circumstances. This audit under Section 53 HGrG also applies to the audit of municipal corporations and institutions under the respective state regulations.
In performing the audit, we generally apply the auditing standard of the Institute of Public Auditors in Germany (Institut der Wirtschaftsprüfer in Deutschland e.V.; IDW PS 720). Individual enterprises and institutions may have prepared their own individual questionnaires on the basis of this standard, which we may then use when carrying out our audit.
The audit of the proper and orderly conduct of the management covers in particular:
- the general management organisation
- the management tools used
- the management activity
The audit according to Section 53 HGrG can be carried out either as an extension of the audit of the annual financial statements or as a separate audit.
- Where there is an extension of the audit of the annual financial statements, our reporting of the audit findings and recommendations (if any) are generally contained in a separate section of the audit report.
- The completed questionnaire is attached to the audit report as a separate annex.
- Insofar as there is a separate audit in accordance with Section 53 HGrG, we prepare a separate report on our audit results and recommendations (if any) which also contains the list of questions responded to in the annex.
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Senior Manager | Public Accountant | Certified Tax Consultant | Specialist Lawyer for International Tax Law