Risk Reporting in the Notes to the Consolidated Financial Statements and Group Management Reports

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

Chapter Chapter 8 in The Audit Failures of the Wirecard Scandal, 2024, pp 109-137 from Springer

Abstract: Abstract Every company takes risks to benefit from opportunities. Some company risks become so concrete that risk provisions have to be created for them—assets are subject to impairment and provisions have to be built. However, this does not provide an overall overview of current and future risks. Therefore, capital market-oriented companies based in Europe are subject to a twofold risk reporting obligation. The first obligation arises from applying IFRS accounting rules. The other results from an EU requirement being transferred into national law. Regarding the disclosure of financial risks, there is some overlap between the international and the national requirements. In the following, we differentiate between financial risks and other risks. The obligation to present financial risks is essentially based on an international accounting standard, while the other risks had to be presented largely based on a supplementary national standard. Both accounting standards were seriously breached which we will elaborate on in detail. Despite his knowledge of the business model, the auditor did not insist on reflecting the reality of Wirecard's risk situation. Instead, he allowed the actual risks not to be addressed at all in some cases and the overall risk situation of the group to be completely concealed, which again represents a massive breach of his professional duties.

Keywords: Breach; Class; Disclosure requirements; Financial instruments; Financial risk; Internal audit; Internal control; Management report; Notes; Risk concentration; Risk management; Risk reporting; Violation (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-031-59854-8_8

Ordering information: This item can be ordered from
http://www.springer.com/9783031598548

DOI: 10.1007/978-3-031-59854-8_8

Access Statistics for this chapter

More chapters in Springer Books from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().