From a legal perspective, the management of corporations is obliged under § 264 of the German Commercial Code (HGB) to prepare annual financial statements (annual accounts) after the end of the financial year (often December 31 of a given year) within certain deadlines – staggered by the respective company`’s size. Against the background of the current economic development, which is difficult to predict (see here), the annual accounts for 2022 are likely to be of particular importance. Especially as these deadlines – irrespective of size (!) – can be considerably shortened in the event of a (foreseeable) crisis of the company.
Thus, the German Federal Chamber of Tax Advisors (“Bundessteuerberaterkammer” recommends in its corresponding notes on annual accounts for companies in crisis (see already here, also note synopsis with new version from 2021 here, in German) that “the preparation of the annual accounts for companies in an economic crisis must take place within 2 to 3 months after the end of the financial year.” In addition, the provision of § 102 StaRUG has put the case law of the German Federal Court of Justice (BGH) on the warning obligations of tax advisors, tax agents, auditors, certified public accountants and lawyers (see on the liability of tax advisors in case of non-warnings here) into a statutory form. Against this background, the preparation of annual financial statements accounts should be given higher priority, especially for companies that fear having to repay Corona subsidies.
Companies subject to mandatory auditing – even without the sword of Damocles of an imminent repayment of Corona subsidies – may face additional trouble when the auditor assesses the going concern forecast (“Fortführungsprognose“), since the Institute of German auditors (IDW) has announced that in view of the polycrisis it wants to focus more on the respective company’s risk provisioning (see here and here for more details, in German). The situation is not made any easier by the fact that a forecast period of twelve months generally applies to the going concern forecast in the context of the preparation of the annual financial statements in accordance with said § 264 HGB, whereas a forecast period of only four months applies to the preparation of the going concern forecast in the context of an over-indebtedness audit in accordance with § 19 (2) InsO due to the requirements of § 4 (2) SanInsKG (see more detailed explanations here) up to December 31, 2022. Accordingly, if there are any doubts about the company’s ability to continue as a going concern over the next twelve months, it should be clarified directly – and on a rolling basis – that the company’s ability to continue as a going concern is assured at least over the next four months.