As a result of the accounting scandal in the former DAX Group Wirecard with its bosses from Austria at the time, complex company structures will be closely controlled in Germany in the future.
Today the Bundesrat passed a law that the Bundestag has already passed. BaFin is granted additional powers, and the regulations for auditors are tightened.
The fix package aims to prevent another scandal like the one that happened with the now insolvent financial service provider Wirecard. The group is said to have reported air bookings and fictitious profits in the billions for years. Financial regulators and auditors are criticized for not noticing before.
The responsibilities for monitoring the balance sheet are now grouped into BaFin. BaFin employees are no longer allowed to trade certain financial products themselves. The previous two-stage procedure will be simplified with the German invoice audit office.
Changed after five years
Additionally, auditors must change after five years at the most so that they are no longer operationally blind. It will also bear greater responsibility: the maximum liability limits for auditing firms geared to capital markets will be quadrupled to 16 million euros.
There is no longer an upper limit to serious neglectful behavior. “False oath in the balance sheet,” that is, if it is wrongly claimed that the financial statement gives an accurate picture of the company’s position, may be punished in the future with imprisonment of up to five years. The law is set to go into effect in July.