Audit by the supervisory board. Audit by auditors of the annual accounts

Last Updated on May 29, 2021 by LawEuro

Stock Corporation Act (Laws / Regulations of Germany)

Chapter 2
Audit of the annual accounts

Subchapter 1
Audit by auditors of the annual accounts

Sections 162 to 169
(repealed)

Subchapter 2
Audit by the supervisory board

Section 170
Submission to the supervisory board

(1) The management board is to submit the annual accounts and the management report to the supervisory board without undue delay after they have been drawn up. The first sentence shall apply mutatis mutandis to individual accounts pursuant to section 325 (2a) of the Commercial Code (HGB) as well as, in the case of parent companies (section 290 subsections (1) and (2) of the Commercial Code (HGB)), to the consolidated financial statements and the consolidated management report. If a separate non-financial report (section 289b of the Commercial Code (HGB)) or a separate consolidated non-financial report (section 315b of the Commercial Code (HGB)) has been prepared, it is to be submitted pursuant to the first sentence as well.

(2) Concurrently, the management board is to submit the proposal to the supervisory board that the management board intends to submit to the general meeting regarding the appropriation of the net income. Unless, in light of its substance, the proposal needs to be organised differently, it is to be structured as follows:

(3) Each member of the supervisory board is entitled to obtain knowledge of the submissions made and of the audit reports. The submissions and audit reports are to be forwarded to each member of the supervisory board or, insofar as the supervisory board has adopted a corresponding resolution, to the members of a committee.

Section 171
Audit by the supervisory board

(1) The supervisory board is to audit the annual accounts, the management report, and the proposal regarding the appropriation of the net income; in the case of parent companies (section 290 subsections (1) and (2) of the Commercial Code (HGB)), it is to also audit the consolidated financial statements and the consolidated management report. Where the annual accounts or the consolidated financial statements are to be audited by an auditor of annual accounts, said auditor is to participate in the deliberations of the supervisory board or of the audit committee regarding the documents submitted and is to report on the substantial results of his audit, in particular on any findings he has made regarding significant weaknesses of the internal control system and of the risk management system as concerns the accounting process. The auditor shall inform on any circumstances giving rise to the concern that he might be biased and regarding any performance he has provided in addition to auditing the accounts. If a separate non-financial report (section 289b of the Commercial Code (HGB)) or a separate consolidated non-financial report (section 315b of the Commercial Code (HGB)) has been prepared, the supervisory board is to audit such report as well.

(2) The supervisory board is to report in writing to the general meeting on the result of the audit. In the report, the supervisory board is to also inform on the manner and scope in which it has audited the management of the company’s affairs in the course of the financial year; in the case of companies listed on the stock exchange, the supervisory board is to state in particular which committees have been formed, while informing on the number of its meetings and those of the committees. Where the annual accounts are to be audited by an auditor of annual accounts, the supervisory board is to furthermore state its position regarding the result of the audit of the annual accounts performed by the auditor of the annual accounts. At the conclusion of the report, the supervisory board is to declare whether, as a consequence of the conclusive result of its audit, exception is to be taken and whether it endorses the annual accounts drawn up by the management board. In the case of parent companies (section 290 subsections (1) and (2) of the Commercial Code (HGB)), the third and fourth sentences shall apply mutatis mutandis to the consolidated financial statements.

(3) The supervisory board is to forward its report within one (1) month of having received the documents submitted to it to the management board. Where the report is not forwarded to the management board within the period set, the management board is to set a period for the supervisory board, and shall do so without undue delay, such period amounting to no more than one (1) month. Where the report is not forwarded to the management board prior to expiry of this further period, the annual accounts shall be deemed to not have been endorsed by the supervisory board; in the case of parent companies (section 290 subsections (1) and (2) of the Commercial Code (HGB)), the same shall apply regarding the consolidated financial statements.

(4) Subsections (1) to (3) shall apply also as regards individual accounts pursuant to section 325 (2a) of the Commercial Code (HGB). The management board may disclose the accounts set out in the first sentence only after they have been endorsed by the supervisory board.

Table of contents (Stock Corporation Act)