Institute der Wirtschaftsprüfer in Deutschland e.V. (Institute of Public Auditors in Germany, Incorporated Association - IDW) is a privately run organization based in Düsseldorf established to serve its members who comprise both individual Wirtschaftsprüfers (German Public Auditors) and Wirtschaftsprüfungsgesellschaften (German Public Audit firms) (Bylaws ç1, ç3). The IDW was established on a voluntary basis rather than having been established under German law. In accordance with its Articles of Incorporation, the IDW does not operate as a commercial business and is a not-for-profit organization (Bylaws ç2 Sec. 5). Membership was 12,909 full members, of whom 11,782 were German public auditors (91% of all German public auditors) and 1,127 were German public audit firms (Bylaws ç4 Sec. 4).
1884 saw the introduction of the foundation audit (Gründungsprüfung) for stock corporations (Aktiengesellschaften). As a result, courts began appointing so-called Sworn Book Auditors (Beeidete Bücherrevisoren) as sworn experts in accounting matters. The North German Hanseatic cities created legal frameworks for the activities of this profession. Later, the opportunity to appoint Book Auditors was established at the national level through Section 36 of the Trade Regulation Act (Gewerbeordnung). In 1890, the Deutsche Treuhandgesellschaft (German Trust Company) was established. The Association of German Book Auditors (VDB), which emerged from a merger of Berlin-based auditors, was constituted in 1900. English and American firms, such as Price Waterhouse and Whinney's, established branch offices in Berlin.
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By 1929, the VDB counted 853 Book Auditors as its members. In the summer of 1929, the Frankfurter Allgemeine Versicherungs AG (FAVAG), the second-largest insurance company in the German Reich, collapsed. Against the backdrop of the FAVAG collapse and to accelerate parts of the reform, the "Ordinance of the Reich President on Stock Corporation Law, Bank Supervision, and Tax Amnesty (VO) was published on September 19, 1931. Among other things, it contained regulations on the duty of disclosure (annual report, annual financial statements, and audit). Balance sheet auditors were only permitted to be individuals experienced and educated in bookkeeping. Auditing firms were only permitted to audit balance sheets if one of their owners, board members, or managing directors was experienced and educated in bookkeeping.
The Institut für das Revisions- und Treuhandwesen e.V. (IRT) was founded in August 1930 based in Berlin by several professional associations from the German auditing and fiduciary sector (Verband deutscher Bücherrevisionen (VDB), Fachgruppe der Treuhänder im Verband Deutscher Diplom-Kaufleute (VDDK), Verband Deutscher Treuhand- und Revisionsgesellschaften e.V., and Reichsbund Deutscher Treuhand-Aktiengesellschaften). In 1930 the Main Office for publicly appointed auditors (Wirtschaftsprüfer) was established.The IRT's goal was to participate in the legislation for the auditing profession. Simultaneously, the IRT attempted to bridge the differing interests between individual auditors and the larger fiduciary companies. The states of the German Reich established the legal and institutional framework for the new profession. In 1931, twelve admission and examination bodies for Public Auditors were created. The profession of the Wirtschaftsprüfer (Public Auditor) was created by the 1st Implementing Ordinance to the VO on December 15, 1931. Public Auditors had to be publicly appointed, and auditing firms had to be registered.
On February 1, 1932, the Institut der Wirtschaftsprüfer e.V. (IDW) [Institute of Public Auditors, Incorporated Association] was established in Berlin through a renaming of the IRT. Only Public Auditors (Wirtschaftsprüfer) and Public Audit firms (Wirtschaftsprüfungsgesellschaften) could become members of the IDW. One of the goals of the IDW was to develop into a professional representative body that could uniformly advocate for its interests externally. The IDW published its first professional opinion in 1933; the topic was 'The Level of Detail in the Audit Report,' followed by 17 further professional opinions later that same year. The journal's inaugural issue in January 1932 cemented the name 'Der Wirtschaftsprüfer' as the essential professional reading for all publicly appointed auditors. The first managing directors were Dr. Hans Adler and Dr. Paul-Ludwig Buchholz. It was a private association without a public-law character, with the intention of developing into a professional representative body. A professional liability insurance policy for the members was concluded with Lloyd's. The âÂÂConfidential Newsâ (Vertraulichen Nachrichten) was published as the members' magazine. The first technical committeeâÂÂshortly thereafter renamed the Main Technical Committee (HFA)âÂÂwas constituted with the task of clarifying important issues concerning mandatory audits. The first annual meeting took place on February 19, 1933. In May 1933, the Third Reich recognized the IDW as the official professional representative body for Public Auditors. In June 1934, membership in the IDW became mandatory for Public Auditors. The mandatory audit requirement for all stock corporations (Aktiengesellschaften) is introduced in 1934. In 1935 a loose-leaf collection of professional opinions (Fachgutachten) is published for the first time. The statutory annual audit is suspended by regulations dated September 4th 1934. In 1936 the auditing of cooperatives by certified public auditors is regulated.
After its integration and dissolution into the Reich Chamber of Economic Trustees in April 1943, the Chamber itself was dissolved in October 1945 following the end of World War II. In 1946, individual institutes reformed in Germany, and the associations in the British Occupation Zone merged in the same year to form the Institut der Wirtschaftsprüfer e.V. with 440 voluntary members starting in Nord-Rheinprovinz/Westfalen and began publishing the "Fachnachrichten" newsletter. Further state representations were founded in the following years. The association moved to Düsseldorf in 1948. On September 18, 1950, its own publishing house, Verlagsbuchhandlung des Instituts der Wirtschaftsprüfer [Publishing House of the Institute of Public Auditors], was founded as a GmbH (limited liability company). In 1954, the IDW was a founding member of the Union Europénne des Experts Comptables Economiques et Financiers [European Union of Economic and Financial Accountants]. In the same year, the association's name was changed to Institut der Wirtschaftsprüfer in Deutschland e.V. [Institute of Public Auditors in Germany, Incorporated Association]. The year 1961 saw the enactment of the federal Auditors' Act (WPO), which established the Chamber of Public Auditors (WPK) to take over the professional regulatory functions for the auditing profession. The IDW offered preparatory courses for the Public Auditor examination for the first time in 1966.
The publishing house has operated as IDW-Verlag GmbH since 1972. When the IASC (International Accounting Standards Committee) was founded in 1973 and the International Federation of Accountants (IFAC) was founded in 1977 at The 11th International Congress of Accountants in Munich, the IDW was again involved as a founding member in each instance. In 1995, the IDW and the WPK reinforced auditing standards by issuing a joint statement (VO 1/1995) focused on Quality Assurance in Auditing Practice.
The 1998 KonTraG Act increased auditor liability limits and mandated internal rotation for auditors of listed companies, while also establishing the DRSC. The 1998 Capital Market Access Facilitation Act (KapAEG) allowed listed companies to prepare consolidated financial statements using IAS or US-GAAP, providing an exemption from German HGB rules. In 2000, the KapCoRiLiG Act was published, subjecting limited-liability commercial partnerships to the same accounting and auditing requirements as corporations. The 2002 Transparency and Disclosure Act (TransPuG) was enacted, primarily resulting in changes to the content of the audit report. On July 30, 2002, the Sarbanes-Oxley Act (SOX) came into effect in the US, significantly impacting the German auditing market. The 2005 Auditor Oversight Act (APAG) established an independent commission to supervise auditors and sworn book auditors conducting statutory audits.
2009: With the entry into force of the Accounting Law Modernization Act (BilMoG) on May 29, 2009, German accounting law underwent fundamental changes in the sense of modernization and adaptation to international accounting principles. On May 27, 2014, the EU Regulation and amended Audit Directive governing the audit of public-interest entities (PIEs) were published, marking a major European audit reform. In November 2018, the IDW published the first major package of 12 draft Germanized International_Standards_on_Auditing (ISA [DE]), with further drafts following in 2019.
The IDW was established in 1932 and operates with approximately 130 employees (34 of whom hold German Public Auditor, Tax Advisor, or Attorney qualifications). The organizational structure includes twelve regional state groups (Landesgruppen) supported by seven regional offices to represent members' local interests. Governance is handled by three main organs: the Wirtschaftsprüfertag (General Assembly of Members), the Verwaltungsrat (Administrative Board), and the Vorstand (Executive Board), the latter composed of six honorary and three managing members. The bylaws detail the membership and define concrete professional duties for actively practicing members. These duties include adhering to the IDW's principles for quality assurance, providing a written justification for any deviation from IDW publications (Auditing Standards, Accounting Opinions) in the audit report, and completing an average of 40 hours of continuing professional development per year.
In accordance with its by-laws, the organization fosters the technical domain of the public auditor and represents the interests of the profession (Bylaws ç2 Sec. 1). The IDW does this both nationally and internationally through collaboration within the various committees, and with permanent and ad-hoc IDW working parties in cooperation with technical staff at the headquarters in Düsseldorf (Bylaws ç2 Sec. 4).
The organization:
The IDW's technical work is mainly apparent in:
The IDW also provides:
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The IDW technical committees monitor national and international developments in their respective fields. Their primary task is to promote consistency in handling industry- or topic-specific issues and to coordinate the joint approach of the public auditing profession across three main areas:
By doing so, they establish the Generally Accepted Auditing Standards (GAAS) for professional practice.Strategy, Problem-Solving, and Policy
The committees address issues where current practice is inconsistent and new problem areas arise, often factoring in industry-specific details. They identify potential strategic IDW projects, support the executive board in defining professional positions, and assist in preparing input for general standard-setting and legislative proposals.
The Main Technical Committee (HFA) (Assurance) and the Technical Committee on Financial Reporting (FAB) (Reporting) ensure consistent and unified technical work. They are statutorily reserved the right to issue binding technical pronouncements, such as ISA-DE, IDW Auditing Standards, IDW Quality Control Standards, and IDW Statements on Financial Reporting. The HFA and FAB adopt broad, cross-industry standards in their areas of competence (HFA for auditing/quality assurance; FAB for external/internal corporate reporting). Furthermore, standards from other committees generally require the approving acknowledgment of the HFA or FAB before publication to maintain a coherent professional view.
ISA-DE, IDW Auditing Standards (IDW Prüfungsstandards), IDW Quality Control Standards (IDW Qualitätssicherungsstandards), IDW Statements on Financial Reporting (IDW Stellungnahmen zur Rechnungslegung) and IDW Standards are developed in a fixed procedure in which, based on published drafts of these pronouncements, professionals and the interested public are given the opportunity to comment.
In the interest of traceability and transparency of the IDW's professional work, the comments from professionals and the interested public on published drafts are published on the IDW website, unless this is expressly rejected by the author. After the commenting phase has ended, the profession and the interested public must be given the opportunity for a hearing (for ISA-DE, IDW Auditing Standards, IDW Quality Control Standards) or a technical discussion (Fachgespräch) (for IDW Statements on Financial Reporting, IDW Standards).
Final IDW pronouncementsâÂÂspecifically ISA-DE, IDW Auditing Standards (PS), IDW Quality Control Standards (QS), IDW Statements on Financial Reporting, and IDW StandardsâÂÂare primarily adopted by two central committees:
Consultation Requirement: If a standard is adopted by a different, specialized IDW technical committee, it must be submitted to the relevant central committee (HFA and/or FAB) for approving acknowledgment (billigende Kenntnisnahme).
Standards become effective on the application date specified within the document, which must take into account the time needed for preparation and implementation in practice. Early application is permissible if explicitly allowed by the pronouncement and provided that all regulations contained within are fully observed. In justified cases (e.g., changes in law or jurisdiction), the HFA or FAB can decide to invalidate an existing standard and recommend early application of the new draft during the final adoption phase, enabling professionals to implement the revised view sooner.
IDW Audit Notes (Prüfungshinweise) and IDW Financial Reporting Notes (Rechnungslegungshinweise):
These are developed by the relevant working group or committee and primarily reflect (preliminary) assessments or practical recommendations. Reports on meetings of other technical committees are generally not coordinated with the HFA or FAB. Coordination is only necessary if the pronouncements address overarching issues.
Note on ISA [DE]: International Standards on Auditing (ISA-DE) are published in German translation, with necessary deviations due to specific legal regulations in Germany, marked by "D-Textziffern" (D-text paragraphs).
This list provides a categorized and chronological overview of selected pronouncements from the Institute of Public Auditors in Germany (IDW), including Auditing Standards (PS), and adopted International Standards on Auditing (ISA [DE]).
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This section lists various IDW PS, categorized by their main content focus, with the latest status date and application note where available.
This section lists the IDW Prüfungshinweise (IDW PH), which provide detailed guidance for applying IDW Auditing Standards (IDW PS) and other relevant regulations.
This section lists the Q&A publications issued by the IDW to clarify the application of ISA [DE] and their counterpart German Auditing Standards (IDW PS/EPS).
This section lists the IDW Stellungnahmen zur Rechnungslegung (IDW RS), which provide authoritative guidance on German GAAP (HGB) and IFRS accounting issues, categorized by the issuing technical committee.
This section lists the IDW Rechnungslegungshinweise (IDW RH), which are specific accounting guidance notes, categorized by the issuing technical committee.
This section lists the IDW Standards (IDW S), which provide authoritative guidance on general, non-audit-related topics like business valuation, restructuring, and insolvency.
This section lists Questions and Answers providing practical clarification for the IDW S (Non-Audit Standards).
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This section lists the IDW Standards for Quality Control.
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This section lists IDW Guidance on Tax Issues.
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This section lists IDW Practice Notes, which address current practical issues in auditing and advisory.