Frankfurt. A significant number of financial statements from listed companies in Germany contain errors, according to the country's financial regulator. Germany's Federal Financial Supervisory Authority (BaFin) found flaws in 50 out of 178 corporate filings it examined in recent years, Thorsten Pötzsch, the executive director responsible for financial reporting enforcement, told Handelsblatt (Friday edition). "This means nearly one in three audited financial statements had deficiencies," he said.
Germany uncovers flaws in nearly one-third of corporate financial reports
Following reforms introduced after the 2022 Wirecard scandal, BaFin assumed sole responsibility for reviewing the financial statements of companies whose securities are admitted to trading on Germany's regulated market—a group currently comprising 424 firms. Pötzsch described the reform as "the right and necessary step," explaining: "For wrongdoers, the likelihood of being caught manipulating financial statements has increased significantly."
The regulator only flags "material" errors, Pötzsch noted. "The classic cases involve overstated receivables and inflated property valuations in balance sheets." Often, companies also fail to properly account for impairments in asset values, while management reports frequently misrepresent the actual economic situation. Currently, 60 specialists work on BaFin's financial reporting enforcement team, he said. The authority has steadily increased its number of audits year by year. "Last year, we conducted 50."
Read also:
- American teenagers taking up farming roles previously filled by immigrants, a concept revisited from 1965's labor market shift.
- Weekly affairs in the German Federal Parliament (Bundestag)
- Landslide claims seven lives, injures six individuals while they work to restore a water channel in the northern region of Pakistan
- Escalating conflict in Sudan has prompted the United Nations to announce a critical gender crisis, highlighting the disproportionate impact of the ongoing violence on women and girls.
