This chapter analyzes the role of financial accounting in the German financial system. It starts from the common perception that German accounting is rather 'uninformative'. This characterization is appropriate from the perspective of an arm's length or outside investor and when confined to the financial statements per se. But it is no longer accurate when a broader perspective is adopted. The German accounting system exhibits several arrangements that privately communicate information to insiders, notably the supervisory board. Due to these features, the key financing and contracting parties seem reasonably well informed. The same cannot be said about outside investors relying primarily on public disclosure. A descriptive analysis of the main elements of the Germany system and a survey of extant empirical accounting research generally support these arguments.

The role of accounting in the German financial system

This chapter analyzes the role of financial accounting in the German financial system. It starts from the common perception that German accounting is rather “uninformative”. This characterization is appropriate from the perspective of an arm’s length or outside investor and when confined to the financial statements per se. But it is no longer accurate when a broader perspective is adopted. The German accounting system exhibits several arrangements that privately communicate information to insiders, notably the supervisory board. Due to these features, the key financing and contracting parties seem reasonably well informed. The same cannot be said about outside investors relying primarily on public disclosure. A descriptive analysis of the main elements of the Germany system and a survey of extant empirical accounting research generally support these arguments.

https://www.econstor.eu/bitstream/10419/25392/1/373432526.PDF

Even six years after the introduction of the ad-hoc-disclosure rules (section 15 of the German securities law) regulating the immediate release of material information, there is still considerable uncertainty among German companies as to how to meet the legal requirements. This uncertainty is especially severe with respect to material information resulting from earnings changes in the context of annual and quarterly reporting. This paper develops an approach for providing a capital-market-oriented corporate disclosure system.

https://www.econstor.eu/bitstream/10419/76949/1/wp070.pdf

Publizitätspflichten börsennotierter Aktiengesellschaften im Spannungsfeld zwischen Regelberichterstattung und Ad-hoc-Publizität - Überlegungen zu einer gesetzeskonformen und kapitalmarktorientierten Umsetzung

German corporate group law (or rather, to be more precise, the German Recht der verbundenen Unternehmen, i.e., the law of affiliated companies, §§ 15 ff., 291 ff. Marketable Share Company Act [Aktiengesetz, abbreviated AktG]) owes its existence to special concerns of the German legislature at the end of the 1950s and the beginning of the 1960s regarding the ability to protect the interests of outsiders in group-dependent marketable share companies (Aktiengesellschaften). The interests of shareholders and creditors were considered to be so intensive, so inscrutable and so continuously endangered, that the legislature believed that the existing company law was incapable of satisfactorily providing the requisite protection.

Protection of Minority Shareholders, Investors and Creditors in Corporate Groups: the Strengths and Weaknesses of German Corporate Group Law

Eine wesentliche Rahmenbedingung fur die Unternehmenskommunikation sind die gesetzlich verankerten Informations- und Publizitatspflichten. Vor dem Hintergrund des sich stetig verscharfenden regulatorischen Umfelds kommt ihnen in der Praxis besondere Bedeutung zu. Dies gilt insbesondere fur die handels- und gesellschaftsrechtlichen sowie kapitalmarktrechtlichen Informations- und Publizitatspflichten. Gerade in diesem Bereich hat der Gesetzgeber, nicht zuletzt durch die Umsetzung von Europaischen Richtlinien ins nationale Recht, fur ein engmaschiges Netz rechtlicher Rahmenbedingungen gesorgt.

Peter Hommelhoff

Papers

Anlegerinformationen im Aktien-, Bilanz- und Kapitalmarktrecht