Financial audit in Germany's banking sector
A bank's annual financial statements are checked by an external auditor. In Germany the assignment reaches beyond accounting: § 29 of the Banking Act requires the auditor to examine additional supervisory duties. Internal audit and an inspection by the supervisor are different processes with different mandates.
What the external auditor checks
Under § 29 of the German Banking Act (KWG), the auditor examines the bank's financial position and specified reporting and organizational duties as part of the annual audit. Findings go into the audit report; serious matters can trigger a direct notification to BaFin and the Bundesbank. The exact scope depends on the institution and applicable rules.
Internal audit is a bank function
Internal audit tests processes and controls throughout the year under a bank's own audit plan. It reports findings to management and the supervisory body. The external auditor forms an opinion on the annual accounts and fulfills a statutory reporting mandate. A supervisory inspection by BaFin or the Bundesbank has yet another legal basis. The Bundesbank overview (in German) describes its bank examinations.
Where technology enters the audit file
A bank auditor needs evidence for balances, loans, access rights and outsourced systems. A risk model may affect provisions or regulatory figures; an ICT provider may affect the reliability of records. Bank risk management and DORA in Germany cover two of the operating contexts that shape the evidence.
Is an external audit the same as a supervisory inspection?
No. The external auditor is appointed for the statutory annual audit and has additional duties under § 29 KWG. BaFin and the Bundesbank can examine a bank in their supervisory roles. A finding in either process can matter to the other, but the mandates remain distinct.
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