When Must an Annual Financial Statement Be Audited?

The audit of the annual financial statement is an important process that helps companies ensure the accuracy and transparency of their financial reports. EGIDO Tax Advisory Firm offers comprehensive services to assist companies in complying with legal requirements according to the German Commercial Code (HGB). In this article, you will learn when an annual financial statement must be audited and which specific paragraphs of the HGB govern this.

Legal Foundations According to HGB

The German Commercial Code (HGB) sets the legal framework for the preparation and audit of annual financial statements in Germany. Key paragraphs that regulate the audit obligation are:

§ 316 HGB: This paragraph stipulates that corporations that are not small corporations and companies of public interest are required to have their annual financial statements audited. This audit must be conducted within three months after the end of the fiscal year. It serves to identify potential risks early and to strengthen stakeholder confidence.

According to § 267 HGB, corporations are generally classified into three size categories: small, medium-sized, and large. A medium-sized corporation does not meet at least two of the following three criteria:

1. A balance sheet total of more than 6 million euros.

2. Net sales of more than 12 million euros.

3. Employing more than 50 employees on average annually.

Deadlines and Obligations for Companies

The legal deadlines according to the HGB are crucial for companies to have their annual financial statements audited and submitted in a timely manner. Large corporations and companies of public interest must ensure that their audit is completed within three months after the end of the fiscal year.

Small and medium-sized companies are not legally required to audit their annual financial statements, but a voluntary audit can help strengthen stakeholder confidence and identify potential risks early.

Why EGIDO?

EGIDO offers tailored auditing services that help companies audit their annual financial statements in accordance with legal requirements. With an experienced team of auditors and tax advisors, we support our clients to ensure a thorough and timely audit and minimize potential risks. We utilize the latest technical possibilities and offer a fast, uncomplicated audit.

The audit of the annual financial statement according to the provisions of the HGB is an important step for companies to ensure the accuracy and transparency of their financial reporting. By adhering to legal deadlines and obligations, companies can minimize potential risks and strengthen the confidence of their stakeholders. With EGIDO's tailored auditing services, companies can be assured that their annual financial statements are properly and efficiently audited.