Fundamental Principles of an Audit

Edgar Löw () and Reinhard Heyd ()
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Edgar Löw: Frankfurt School of Finance & Management

Chapter Chapter 2 in The Audit Failures of the Wirecard Scandal, 2024, pp 23-38 from Springer

Abstract: Abstract Wirecard was a German company. Its consolidated financial statements were subject to German accounting rules and, due to its stock exchange listing, also to the IFRS. The final audit was carried out in accordance with German law and auditing standards. To understand the requirements for an audit under German law and, to discover the fundamental failures in the auditor's application of these requirements, it is necessary to know the German Fundamental Principles of an Audit. They are based on the International Standards on Auditing, which they specify for the German legal environment and supplement them in certain areas. We provide a legal introduction to the Fundamental Principles of an Audit, which include German law and, above all, German auditing standards. Two standards are of fundamental importance for the planning and execution of an audit—on the one hand, the risk-oriented audit approach and principle of materiality and, on the other, how to deal with risks of inaccuracies and violations.

Keywords: Audit; Error; Financial Statement; Fraud; Generally Accepted Standards on Auditing (GoA); German Standards on Auditing (PS); HGB; IFRS; Institute of Public Auditors in Germany (IDW); Misstatement; Principle of Materiality; Risk-oriented Audit (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/978-3-031-59854-8_2

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