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Choosing an auditor has been easy for many years: Deloitte, EY, KPMG or PWC.
It has to be one of the Big Four, at least when it comes to auditing a globally intertwined group with international accounting.
“It's hard to get another examiner who can do this.
You won't find anyone, ”says Ute Wolf, CFO of the industrial company Evonik.
She would like to have more choice, but I cannot force it.
Wolf warns of over-regulation of the auditor market by the legislator.
Chancellor candidate Scholz presents the SPD election program
In its election manifesto, the SPD strongly focuses on the issues of climate protection and social justice.
Chancellor candidate Olaf Scholz outlines the priorities - Greens and leftists react calmly.
Source: WORLD / Isabell Finzel
Wolf is not alone in this.
The new law with the awkward name “Law to Strengthen Financial Market Integrity” - FISG for short - met with criticism before the first reading in the Bundestag on Thursday.
Quite a few observers fear that the position of the Big Four, the big four, will be further cemented instead of broken up.
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The FISG is the legislature's answer to the Wirecard financial scandal, in which, in addition to the financial supervisory authority BaFin, the auditor EY is also accused of having discovered the alleged billions in fraud too late.
EY faces high claims for damages from Wirecard victims.
Federal finance minister and SPD candidate for chancellor Olaf Scholz sees the draft law as a "decisive step to strengthen the balance sheet control, to reform the auditing and to crack down on criminal machinations".
One of the central contents of the draft law is that the auditors should be made more personally liable for their own misconduct.
For example, the upper limit of liability for auditing capital market-oriented companies will in future be 16 million euros - the first draft even stated the figure of 20 million euros.
However, this upper limit only applies in cases of slight negligence.
In the case of intent and even gross negligence, auditors have unlimited liability according to the plans of the federal government.
So far, unlimited liability has only applied in the event of intent, otherwise the upper limit of four million euros applied.
"Will still promote concentration in the examination market"
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The draft law drawn up by the two SPD ministries for finance and justice speaks of a "deterrent punishment".
The increase in the maximum liability limits is also taking place against the background that the previous limits have remained unchanged since 1998 and are low by international standards.
The Institut der Wirtschaftsprüfer (IDW), a lobbying organization in the industry, believes that unlimited liability in the event of gross negligence is a mistake.
"The tightening of liability will encourage concentration in the auditing market," says IDW CEO Christoph Regierer, who heads the German business of the auditor Mazars - by his own account number nine on the local market.
Small and medium-sized auditors, in particular, would continue to be excluded from the market, since insurance coverage would simply be too expensive.
One sees this in a similar way in the CDU / CSU parliamentary group in the Bundestag.
"It is already foreseeable at this point in time that the liability regulation provided in the FISG draft goes well beyond the target and would counterproductively even encourage concentration on the auditing market," say the two CDU finance politicians Antje Tillmann and Matthias Hauer in a joint statement.
A moderate extension of liability is required, but the parliamentary group strictly rejects the planned unlimited liability in the event of gross negligence.
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The two CDU politicians also bring a topic into play that is also being raised outside of the parties these days: the so-called joint audits, i.e. a double occupation of the auditors.
"The four-eyes principle could increase the quality of the audit and counteract the existing concentration on the auditor market to a greater extent," said the Union.
The multi-supervisory board member Annette Messemer, who sits on the board of a number of French companies, including the major bank Société Générale, is in favor of this.
"That is the only instrument to break the oligopoly," says Messemer.
In France, this has already led to a significant increase in the market share of the second-tier auditors.
One approach is that the appointment times of the two audit firms overlap.
One of the two auditors leaves every five years, and a new one is added for ten years.
Final reading planned for March 26th
In the SPD parliamentary group, one does not want to commit yet.
"We are checking whether the objections to a stronger concentration of power are justified," says the financial policy spokesman Lothar Binding.
The SPD also has no interest in the Big Four becoming the Big Three.
But he first wanted to see exactly how expensive the tightening of liability could actually be.
The joint audit also sounds interesting, but it may cause too much unrest and a constant argument between the auditors.
That would not help anyone either.
There is not much time left.
An expert hearing in the Bundestag is scheduled for March 15, the final reading and adoption of the law is planned for March 26.
“Everything on stocks” is the daily stock market shot from the WELT business editorial team. Every morning from 7 a.m. with the financial journalists Moritz Seyffarth and Holger Zschäpitz. For stock market experts and beginners.
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