The Accounting Control Act (Bilanzkontrollgesetz – BilKoG)

The Accounting Control Act (Bilanzkontrollgesetz – BilKoG) of
December 13 2004 introduced a two-stage enforcement proce-
dure into German law. In the first stage, an independent financial
reporting enforcement panel audits the financial statements of
publicly traded companies at the request of the Federal Financial
Supervisory Authority (Bundesanstalt für Finanzdienstleistungs-
aufsicht – BaFin). Requests are made if there are indications of
violations of financial reporting requirements and for general
sampling purposes.

The findings are disclosed to the audited company and to the
Federal Financial Supervisory Authority. Errors identifed by the
panel are published and must be corrected by the company.
If the company fails to cooperate with the auditor, the Federal
Financial Supervisory Authority may order a second audit.