X hits on this document





8 / 44


German Law Journal

[Vol. 11 No. 02

distance between the supervisory board and the auditors, and they increased the independence of auditors from the management board.

Due to the 1998 legal change, the supervisory board is responsible for the audit assignment with the auditors (Section 111(2)). In Addition, the supervisory board is the direct recipient of the auditor’s report (Section 321(5) GCC). Furthermore, every member of the supervisory board, as a rule, receives a copy of the auditor’s report (Section 170(3)). Finally, the responsible auditor is required to participate in the supervisory board’s deliberations on the annual financial statements and reports on the essential results of its audit (Section 171(1)).

1. Supervisory Board’s Responsibility as to Audit Assignment

The newly established responsibility of the supervisory board to make the audit assignment improves the independence of the auditor vis‐à‐vis the management board, and it strengthens the flow of information from the auditor to the supervisory board. Under the former legal situation, the management board was assigned to make the audit assignment including the audit’s focal points and the auditor’s compensation (Section 318(1) GCC as of 1985). Since the auditor had an interest to audit the company in the following years as well, she needed to get the audit assignment from the management board whose conduct she was supposed to monitor. As a result, the auditor occasionally lost her independence vis‐à‐vis the management board, and she did not appropriately provide the supervisory board with audit‐specific information.37 This changed a great deal under the amended law, which made the supervisory board responsible for making the audit assignment. Thereby, auditors have become much more independent.38 In addition, the supervisory board now receives more and better information on the company’s accounting and auditing, and it cooperates with the auditor more intensively.39 Finally, the supervisory board can now require the auditor to focus particularly on specific accounting issues what seems crucial with regard to the supervisory board’s monitoring obligation towards the management board’s accounting.

37 Heinrich Götz, Die Überwachung der Aktiengesellschaft im Lichte jüngerer Unternehmenskrisen, 40 AG 337, 340‐ 341 (1995); Rainer Funke, Aktienrechtsreform 1997: Aufsichtsrat und Abschlussprüfer, 17 ZIP 1602, 1603 (1996).

38 Hommelhoff & Mattheus (note 23), 257; Manuel René Theisen, Vergabe und Konkretisierung des WP‐ Prüfungsauftrags durch den Aufsichtsrat, 52 DB 341, 346 (1999).

39 See, Official Explanatory Statement (note 17), 16; see also Dietrich Dörner, Ändert das KonTraG die Anforderungen an den Abschlussprüfer?, 51 DB 1, 5 (1998).

Document info
Document views160
Page views160
Page last viewedThu Jan 19 06:55:36 UTC 2017