Legal Requirements

Does one need an internal audit at all?

Currently, there is no direct legal constraint that a company must have an internal audit. However, this does not mean you should forego an internal audit!

The increasingly strict liability rules for executive boards and management may lead to significant problems in case of damages, especially if a company has not taken reasonable and correct precautions for early risk detection, if the company had no functioning internal control system, or if a system is not being monitored regularly.

In particular, the KonTraG and BilMoG have tightened requirements for executive board members (and analogously to managing directors) and the controlling supervisors.

A well run and adequately equipped internal audit covers the requirements that are placed on the monitoring of the internal control and risk management systems in a fairly good manner. For this reason, most large and many mid-sized businesses possess their own auditing office.