Duties

Representation of the Interests and Positions of the Profession towards the Public and Policymakers

As the representative of the entire profession of auditors^[1] in Germany, Wirtschaftsprüferkammer (WPK) represents their professional interests towards the public and articulates these interests towards lawmakers, competent courts and other authorities. Lawmakers, for example, expect well-founded statements on policy issues concerning the profession and audit practice; authorities and courts consider the professional chamber as the point of contact for obtaining expert opinions; organisations and interested third parties want to receive facts and figures on the profession. If permitted WPK also informs third parties (e.g. clients, associations or public agencies) about scope, extent and limitations of the professional requirements to prevent conflicts between third parties and the profession.

WPK serves as Point of Contact for its Members

WPK supports its members in all questions related to professional practice in order to prevent breaches of professional regulations.

Furthermore, WPK’s management board regularly issues statements on selected topics of professional practice. Examples of selected topics are insurance coverage, cooperation with other liberal professions and principles of professional practice.

Appointment / Recognition of new Members and their Revocation

WPK is responsible for the appointment of auditors and the recognition of audit firms as well as for their revocation. Appointment and recognition constitute membership with WPK. Furthermore WPK administers the data of its members in the professional register.

Registration as Statutory Auditor as well as Registration of Third Country and EU/EEA Auditors

Since June 17, 2016 auditors are required to inform WPK about the intention to conduct statutory audits in accordance with § 316 German Commercial Code (HGB). This information is only required for the first statutory audit being conducted.

WPK is also responsible for registering auditors and audit firms from the EU/EEA as well as third country auditors and audit firms.

Disciplinary Oversight

WPK monitors the compliance of its members with their professional duties (§ 57 para. 1 Public Accountant Act (WPO)). In case of a breach of duties the Management Board of WPK is responsible for sanctioning this breach (§ 68 WPO). Possible disciplinary measures are reprimands, fines up to EUR 500,000 for individuals and EUR 1,000,000 for audit firms, temporary prohibition from certain types of professional activities, or final exclusion from the profession. In case of a repeated occurrence of breaches, WPK may also declare a prohibition order.

Breaches of professional duties related to statutory audits of public interest entities according to § 316a sentence 2 HGB are within the responsibility of the Auditor Oversight Body (AOB), which is established at the Federal Office for Economic Affairs and Export Control (BAFA; § 66a para. 6 WPO). At the same time, AOB exercises the public oversight of WPK.

Members may raise objections to disciplinary measures. Subsequent to a fully or partially unsuccessful objection dealt with by the Board of Management of WPK a member may appeal for a professional court proceeding. The so-called professional courts (special divisions of criminal courts/Senate at the District Court of Berlin in the First Instance, Superior Court of Justice of Berlin in the Second Instance and the Federal Court of Justice in the Third Instance) are responsible in these cases. The professional courts are assisted by members of the profession who bring in their professional expertise. WPK has the right to suggest these members of the profession (§ 57 para. 2 No. 11 WPO).

On its website WPK discloses irrevocable disciplinary measures, thereby stating name of the auditor and / or the audit firm, type and nature of the breach, as well as any comment of the auditor / audit firm in response to the disciplinary measure (§ 69 WPO). Additionally, WPK publishes annual reports on disciplinary oversight.

WPK continuously reviews annual and consolidated financial statements audited by its members and published in the Federal Gazette on a random basis. Objective of the financial statement review is to verify whether the published financial statements and the corresponding auditor's opinions comply with legal and professional requirements. However, financial statements of public interest entities according to § 316a sentence 2 HGB are not covered by this review. These companies are subject to the direct public oversight of AOB.

In its annual reports on disciplinary oversight WPK also informs about the results of its financial statement reviews.

Performance of Quality Assurance Procedures

WPK maintains a quality assurance system. It is intended to ensure that the quality control systems of the professional practices are subject to a regular, preventive monitoring process (quality assurance reviews). Auditors, to the extent they conduct statutory audits according to § 316 HGB, must have their practice monitored by an independent auditor ("peer") for quality assurance every six years. If a practice performs statutory audits as defined in § 316 HGB for the first time, it shall undergo a quality assurance review not later than three years after the beginning of the first audit. The quality assurance review comprises an evaluation of the internal quality control system of each practice, which is evaluated in terms of its appropriateness and ability to function. This pertains particularly to compliance with the professional requirements (WPO, Professional Charter and other professional regulations), independence requirements, quality and quantity of the resources deployed as well as the remuneration charged.

Within WPK the Commission on Quality Assurance is responsible for the quality assurance system. The Commission decides about measures aimed at remedying deficiencies. It is furthermore responsible for the registration of quality assurance reviewers and may reject reviewers proposed by an audit firm. The Commission exercises the oversight on the quality assurance reviewers and may participate in the performance of a quality assurance review. The Commission on Quality Assurance issues annual reports on its activities.

The Auditor Oversight Body (AOB) at the Federal Office for Economic Affairs and Export Control (BAFA) monitors if the quality assurance procedures of WPK are performed on an appropriate, adequate and proportionate basis. The ultimate decision making power about rulings of the Commission on Quality Assurance lies with AOB.

The evaluation of the internal quality control system of audit firms that also conduct statutory audits of public interest entities (§ 316a sentence 2 HGB) is performed by AOB through inspections – as far as the public interest entities are affected.

Further information is available under "WPK > Quality assurance".

Professional Examination

Since 1 January 2004 WPK is nationwide responsible for these procedures. Further information can be found under "Auditors > Access to the Profession".

Enactment of Professional Rules in the Form of Professional Charters

WPK can enact professional rules in the form of professional charters. This is for example the Charter for Quality Assurance or the revised version of the Professional Charter for Auditors. Charters are to be adopted by WPK’s advisory board.

Miscellaneous Tasks

Mediation of Disputes

Upon request by the parties involved, WPK mediates disputes between members or between members and their clients.  WPK acts as an objective third party in order to find a suitable solution for both parties involved. Participation in a mediation procedure is voluntary.

Providing Information about Fees

WPK appoints experts and issues expert opinions on fees in court disputes and provides information to its members on fee questions in individual cases. Contrary to the professions of lawyers and tax advisors, who can refer to statutory fee schedules, the fee rates of auditors are freely negotiable - to the extent that they are not acting as tax advisors. No use was made of the waiving a fee schedule according to § 55 WPO. In difficult cases WPK provides assistance on questions concerning the reasonableness of fees.

Anti-Money Laundering

According to the Anti-Money Laundering Act, WPK is required to inform the Financial Intelligence Unit (FIU) of the Federal Criminal Police Office and the competent law enforcement agencies about any notification of suspected money laundering from its members.

Protection against Infringement of Competition Law

WPK protects its members against infringement of rights that are reserved to auditors and audit firms.

Professional Pension Funds

The mandatory membership with WPK is also connected to a membership with a professional pension fund, called „Versorgungswerk der Wirtschaftsprüfer und der vereidigten Buchprüfer im Lande Nordrhein-Westfalen (WPV)“.

Professional Liability Insurance

Auditors and audit firms are legally obliged to have professional liability insurance coverage of at least EUR 1,000,000. WPK in this context is the competent body for securing complete and sufficient professional insurance coverage of the professionals.

Education of Young Professionals

WPK promotes the education of young professionals. Due to sufficient supply from third parties, there is currently neither a need for educational programs of the WPK nor a legal regulation of apprenticeship. An overview of providers of training events and courses can be found here.

Since July 2015, WPK provides an internship database on its homepage. Members may offer available internships and interested applicants can offer their requests.

Furthermore, WPK offers an up-to-date study guide for the respective semester, as well as an overview on study programs according to § 8a und § 13b WPO that provide certain exemptions regarding the Wirtschaftsprüfer examination.

An essential aid for examination candidates is the exam topics summary of previous years which are made available by WPK for training purposes.

Continuing Professional Development

WPK provides its members various measures for continuing professional development.

Support for Start-ups

WPK also provides advice to its members on the foundation of audit firms, in particular regarding the process of recognition. "Formulare/Merkblätter" contains forms, examples and information leaflets. WPK also supports start-up by preparing expert opinions for development banks.

Appointment of an Audit Firm Liquidator

WPK provides support for its members in case a liquidator of an audit firm is needed.

Consultation about Termination or Revocation of an Audit Assignment

The auditor as well as the audited client has to immediately inform WPK in case an audit assignment is terminated or revoked (§ 318 para. 8 HGB). WPK advises its members in advance, whether an intended termination or revocation is legally permitted.

Appointment of Experts

WPK appoints members of the profession possessing expertise as experts to courts, authorities and interested third parties. Specialised professional know-how of members may be retrieved here.

Information for Members

WPK informs its member regularly via website, newsletter and magazine about important developments and relevant current professional issues.

Cooperation with other Organisations