General Terms and Conditions for Auditors and Auditing Firms of 1 January 2017
  1. Scope of Application
(1) The Terms and Conditions of Engagement shall apply to contracts between auditors or auditing firms (hereinafter collectively referred to as “Auditors”) and their clients for audits, tax advice, advice on economic matters and other assignments, unless otherwise expressly agreed in writing or required by law. (2) Third parties may only derive claims from the contract between the auditor and the client if this has been expressly agreed or if there are mandatory statutory provisions. With regard to such claims, these Terms of Engagement shall also apply to such third parties.
  1. Scope and execution of the order
(1) The object of the contract is the agreed service, not a specific economic success. The assignment is carried out in accordance with the principles of proper professional practice. The auditor does not assume any management tasks in connection with his services. The auditor is not responsible for the use or implementation of the results of his services. The auditor is entitled to use expert persons to carry out the assignment. (2) The consideration of foreign legal requirements – except in the case of business audits – of the express written agreement. (3) If the factual or legal situation changes after the final professional statement has been submitted, the auditor shall not be obliged to inform the client of any changes or the resulting consequences.
  1. Obligations of the Client to Cooperate
(1) The contracting authority shall ensure that all documents and other information necessary for the execution of the assignment are transmitted to the auditor in good time and that he is informed of all processes and circumstances that may be of importance for the execution of the assignment. This also applies to documents and other information, processes and circumstances that only become known during the auditor’s work. The client will appoint suitable persons to provide the auditor. (2) At the request of the auditor, the client shall confirm the completeness of the documents submitted and the further information and explanations thus reproduced in a written statement formulated by the auditor.
  1. Ensuring independence
(1) The client shall refrain from doing anything that endangers the independence of the auditor’s employees. This applies for the duration of the contractual relationship, in particular to offers to employ or take over executive functions and to offers to take on orders on their own account. (2) If the performance of the assignment impairs the independence of the auditor, that of the companies affiliated with him, his network companies or such companies associated with him to which the independence regulations apply in the same way as to the auditor, in other employment relationships, the auditor shall be entitled to extraordinary termination of the assignment.
  1. Reporting and oral information
Insofar as the auditor has to present results in writing in the context of the processing of the assignment, this written presentation alone is authoritative. Drafts of written representations are non-binding. Unless otherwise agreed, oral statements and information provided by the auditor shall only be binding if: if they are confirmed in writing. Declarations and information provided by the auditor outside of the assignment are always non-binding.
  1. Disclosure of a professional statement by the auditor
(1) The disclosure of professional statements of the auditor (work results or excerpts of work results – whether in draft or final version) or information about the auditor’s activities on behalf of the client to a third party requires the written consent of the auditor, unless the client is obliged to pass on or provide information on the basis of a law or an official order. (2) The use of professional statements of the auditor and the information about the auditor’s activities for the client for advertising purposes by the client shall be inadmissible.
  1. Rectification of defects
(1) In the event of any defects, the Client shall be entitled to subsequent performance by the auditor. Only in the event of failure, omission or unjustified refusal, unreasonableness or impossibility of subsequent performance can he reduce the remuneration or withdraw from the contract; if the order has not been placed by a consumer, the client may only withdraw from the contract on the grounds of a defect if the service rendered is of no interest to him due to failure, omission, unreasonableness or impossibility of subsequent performance. Insofar as there are further claims for damages, No. 9 applies. (2) The claim for remedy of defects must be asserted by the Client immediately in text form. Claims pursuant to subsection (1) that are not based on an intentional act shall become time-barred after the expiry of one year from the statutory start of the limitation period. (3) Obvious inaccuracies, such as clerical errors, calculation errors and formal deficiencies, which are contained in a professional statement (report, expert opinion and the like) of the auditor, may be corrected by the auditor at any time, even vis-à-vis third parties. Inaccuracies that are likely to call into question the results contained in the auditor’s professional statement entitle the auditor to retract the statement even vis-à-vis third parties. In the aforementioned cases, the client must be heard by the auditor as far as possible.
  1. Confidentiality vis-à-vis third parties, data protection
(1) In accordance with the laws (§323 para. 1 HGB, §43WPO, §203 StGB), the auditor is obliged to maintain secrecy about facts and circumstances that are entrusted to him or become known to him in the course of his professional activity, unless the client releases him from this duty of confidentiality. (2) When processing personal data, the auditor will comply with the national and European regulations on data protection.
  1. Liability
(1) For statutory services provided by the auditor, in particular audits, the applicable statutory limitations of liability shall apply, in particular the limitation of liability of Section 323 (2) of the German Commercial Code (HGB). (2) Insofar as neither a statutory limitation of liability applies nor an individual contractual limitation of liability, the liability of the auditor for claims for damages of any kind, with the exception of damages resulting from injury to life, limb and health, as well as damages that give rise to an obligation of compensation on the part of the manufacturer pursuant to Section 1 of the Product Liability Act, shall be limited to € 4 million in the case of individual damage caused by negligence in accordance with Section 54a (1) No. 2 WPO. (3) The auditor shall also be entitled to defences and objections arising from the contractual relationship with the client vis-à-vis third parties. (4) If several claimants derive claims from a negligent breach of duty by the auditor from the contractual relationship existing with the auditor, the maximum amount specified in subsection (2) shall apply to the relevant claims of all claimants as a whole. (5) A single case of damage within the meaning of subsection (2) shall also exist with regard to a single loss resulting from several breaches of duty. The individual claim includes all the consequences of a breach of duty, regardless of whether damage occurred in one or several consecutive years. In this context, multiple acts or omissions based on the same or similar source of error are considered a single breach of duty if the matters in question are legally or economically related to each other. In this case, the auditor can only be held liable up to the amount of € 5 million. The limitation to five times the minimum sum insured does not apply to statutory audits. (6) A claim for damages shall expire if no action is brought within six months of the written refusal of the compensation and the Client has been informed of this consequence. This does not apply to claims for damages that can be traced back to intentional conduct, as well as in the case of culpable injury to life, limb or health, as well as to damages that give rise to an obligation of compensation on the part of the manufacturer in accordance with §1ProdHaftG. The right to assert the objection of limitation remains unaffected.
  1. Supplementary provisions for audit mandates
(1) If the client subsequently amends the financial statements or management report audited by the auditor and accompanied by an auditor’s opinion, he may no longer use this auditor’s report. If the auditor has not issued an audit opinion, a reference to the audit carried out by the auditor in the management report or at another place designated for the public is only permissible with the written consent of the auditor and with the wording approved by him. (2) If the auditor revokes the auditor’s report, the auditor’s report may not be used any further. If the client has already used the auditor’s report, he must announce the revocation at the request of the auditor. (3) The Client shall be entitled to five copies of the report. Further copies will be invoiced separately.
  1. Supplementary provisions for assistance in tax matters
(1) The auditor shall be entitled to use the facts stated by the client, in particular figures, as correct and complete, both in the case of advice on individual tax issues and in the case of ongoing advice; this also applies to accounting orders. However, he must inform the client of any inaccuracies he has found. (2) The tax consultancy mandate does not include the actions necessary to meet deadlines, unless the auditor has expressly assumed the mandate for this purpose. In this case, the client must submit to the auditor all documents essential for meeting deadlines, in particular tax assessments, in good time so that the auditor has a reasonable processing time. (3) In the absence of a written agreement to the contrary, ongoing tax advice shall include the following activities that fall within the term of the contract:
  1. a) Preparation of annual tax returns for income tax, corporation tax and trade tax as well as wealth tax returns, on the basis of the annual financial statements to be submitted by the client and other statements and evidence required for taxation
(b) Review of tax assessments relating to the taxes referred to in (a)
  1. c) Negotiations with the tax authorities in connection with the declarations and notices referred to in a) and b)
  2. d) Participation in tax audits and evaluation of the results of tax audits with regard to the taxes referred to in a)
  3. e) Participation in objection and appeal proceedings with regard to the taxes referred to under a). The auditor takes into account the main published case law and administrative opinion in both of the aforementioned tasks.
(4) If the auditor receives a lump sum fee for the ongoing tax advice, the activities referred to in subsection (3) (d) and (e) shall be remunerated separately in the absence of any other written agreement.
  1. e) Participation in objection and appeal proceedings with regard to the taxes referred to under a). The auditor takes into account the main published case law and administrative opinion in both of the aforementioned tasks.
(4) If the auditor receives a lump sum fee for the ongoing tax advice, the activities referred to in subsection (3) (d) and (e) shall be remunerated separately in the absence of any other written agreement. (5) If the auditor is also a tax advisor and the Tax Advisor Remuneration Ordinance is to be applied to the calculation of the remuneration, a higher or lower remuneration than the statutory remuneration may be agreed in text form. (6) The processing of special individual questions of income tax, corporation tax, trade tax, standard valuation and wealth tax as well as all questions of turnover tax, wage tax, other taxes and duties shall be carried out on the basis of a special mandate. This also applies to:
  1. a) the processing of one-off tax matters, e.g. in the area of inheritance tax, capital transaction tax, real estate transfer tax
  2. b) participation and representation in proceedings before the courts of fiscal and administrative jurisdiction as well as in criminal tax matters,
  3. c) the advisory and expert activity in connection with transformations, capital increases and reductions, restructuring, entry and exit of a shareholder, sale of business, liquidation and the like, and
  4. d) support in the fulfilment of notification and documentation obligations.
(7) To the extent that the preparation of the annual VAT return is also taken over as an additional activity, this does not include the review of any special accounting requirements or the question of whether all relevant VAT benefits have been exercised. There is no guarantee for the complete recording of the documents for the assertion of input VAT deduction.
  1. Electronic Communications
Communication between the auditor and the client can also be done by e-mail. If the Client does not wish to communicate by e-mail or imposes special security requirements, such as any encryption of e-mails, the Client will inform the auditor accordingly in text form.
  1. Remuneration
(1) In addition to his fee or fee claim, the auditor shall be entitled to reimbursement of his expenses; VAT will be charged additionally. He may demand appropriate advances on remuneration and reimbursement of expenses and make the delivery of his performance dependent on the full satisfaction of his claims. Several clients are jointly and severally liable. (2) If the client is not a consumer, a set-off against claims of the auditor for remuneration and reimbursement of expenses shall only be permissible with undisputed or legally established claims.
  1. Dispute Resolution
The auditor is not willing to participate in dispute resolution proceedings before a consumer arbitration board within the meaning of §2 of the Consumer Dispute Resolution Act.
  1. Applicable law
Only German law shall apply to the assignment, its execution and the claims arising therefrom