The purpose of company financial accounting is to fulfil the legal obligation of external reporting. With frequent changes to German accounting regulations and reports becoming due much earlier, external reporting is increasingly faced with a "compliance" danger. Additionally, with the IFRS and tax legislation increasing the already existing complexity, reliable reporting is becoming more difficult, but at the same time more important for the confidence of the stakeholders.
For years, PwC has been successfully helping companies with the conversion from one regulation to another: US GAAP, IFRS, German Commercial Code (HGB), and other federal state laws. Multiple circumstances require a conversion:
These conversions represent a challenge for companies, and their employees. In addition, they bear extensive effects on systems and processes. With these challenges, it is important to have a competent advisor, with an understanding of the business, to assist the company during the implementation phase.
Wherever necessary, the modular range of services offered by PwC provide full project management and quality assurance. This includes a preliminary survey, clarification of critical accounting issues, support in the determination of adjustment entries and data generation for the notes, and an extensive training program. PwC's expertise also includes the implementation of appropriate IT-solutions.
When new regulations are launched within an existing reporting-tool, numerous challenges arise. Current examples are, IFRS 15 “revenue from contracts with customers” and IFRS 16 “Leases”. With the extensive range of services offered by PwC, PwC can provide quick solutions to these challenges.
Once the conversion of the first reporting year has been completed, work is required on the ongoing optimization of the reporting process and the alignment of the accounting's organization (embedding).
The objective of embedding is to integrate financial statements (e.g. IFRS) more conclusively into corporate processes. The benefit: active regulation, control of the preparation process, and quality assurance. As a result, companies save time and costs due to the automated embedding process and non-value added activities are reduced to a minimum.
The financial accounting department must be able to fulfil a wide range of reporting duties. This calls for the inclusion of the various divisions of a company. PwC assists companies in restructuring responsibilities for IFRS topics according to best practice and identifying the interfaces between the respective divisions (Financial Accounting, Controlling, Treasury, and Legal). Experts acquaint employees from the respective departments with their appointed tasks and keeps them up to speed. In addition, PwC assists companies with the revision of accounting guidelines and the preparation of practice manuals.
New requirements regarding financial accounting must be implemented across departments. At the same time, the correct application of the accounting regulations have to be ensured. It’s also important to keep track of the impact on the business model. Meanwhile, the accounting departments should act as a business partner for other departments to ensure compliance. Depending on the complexity and the judgement of accounting-related issues, it must be decided whether accounting decisions should be standardized and automatized or if embedding in a Center of Excellence with instruction competencies is the better choice. Thanks to individual and cost-effective systems, quality can be ensured and the professional skills of the employees can be regularly controlled.
PwC supports your implementation of an effective Accounting Compliance System and covers all individual needs.
Prof. Dr. Rüdiger Loitz
Assurance Technology & Innovation
Tel: +49 211 981-2839
Tel: +49 201 438-2116