Action Plan Developed by Institut der Wirtschaftsprfer (IDW) BACKGROUND NOTE ON ACTION PLANS Action Plans are developed

by IFAC members and associates to address policy matters identified through their responses to the IFAC Compliance Self-Assessment Questionnaires. They form part of a continuous process within the IFAC Member Body Compliance Program to support the ongoing development and improvement of the accountancy profession around the world. Action Plans are prepared by members and associates for their own use based on the national frameworks, priorities, processes and challenges specific to each jurisdiction. As such, they will vary in their objectives, content and level of detail, consistent with their differing national environments and stages of development, and will be subject to periodic review and upda te. Refer to the Part 1 Assessment of the Regulatory and Standard-Setting Framework Questionnaire and Part 2 SMO Self- Assessment Questionnaire for background information on each member and associate their environment and existing processes. These respons es may be viewed at: http://www.ifac.org/ComplianceAssessment/published_surveys.php Use of Information Please refer to the Disclaimer published on the Compliance Program website.

ACTION PLAN IFAC Member/Associate: Original Publish Date : Last Updated: Next Update: Institut der Wirtschaftsprfer (IDW) September 2009 August 2011 August 2012

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Action Plan Developed by Institut der Wirtschaftsprfer (IDW) GLOSSARY CMS CPD EGAOB FEE HGB IAASB IAESB IASB IES IFRS KWG WPK WPO Compliance Management Systems Continuing Professional Development European Group of Auditors Oversight Bodies Fdration Europenne des Experts Comptables German Commercial Code (Handelsgesetzbuch) International Auditing and Assurance Standards Board International Accounting Education Standards Board International Accounting Standards Board International Education Standards International Financial Reporting Standards German Banking Law Wirtschaftsprferkammer German Public Accountant Act (Wirtschaftsprferordnung)

GENERAL: Action Plans by IFAC Members in Germany This Action P lan reflects the SMO activity areas where IDW has chosen to answer on behalf of the German professional organiza tions (SMOs 2, 3, 5 and 7). Please refer to the Action Plan prepared by Wirtschaftsprferkammer (WPK) for information about other SMO activity areas (SMOs 1, 4 and 6).

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Action Plan Developed by Institut der Wirtschaftsprfer (IDW) Action Plan Subject: Action Plan Objective: SMO 2 - International Education Standards for Professional Accountants and Other IAESB Guidance Continue to use best endeavors to adopt and implement International Education Standards for Professional Accountants and other IAESB Guidance Actions Completion Date Responsibility Resource

Start Date

Background: 1. Overview of education routes as a prerequisite to the Professional Examination 1.1 Educational routes The German Public Accountant Act (Wirtschaftsprferordnung-WPO) sets forth different routes for admission to the profession of Wirtschaftsprfer: Traditionally, candidates need to have a university degree in addition to professional work experience of at least three years, which is extended to four years when the prescribed degree course is shorter than eight semesters. Candidates without a university degree may sit the Professional Examination after having worked for at least 10 years in auditing or at least five years as a Steuerberater, although this route is no longer significant in practice. Citizens of an European Union Member State or a Trea ty Nation in the European Economic Area or of Switzerland may sit an aptitude test, if they have already been approved in other Member States to carry out statutory audits of annual accounts and consolidated accounts. 1.2 The typical professional route requirements for admission for university graduates As a prerequisite for admission to sit the examinations for Wirtschaftsprfer, candidates must have undertaken a specific type of further education ( [Article] 8 WPO [Wirtschaftsprferordnung - German Law Regulating the Profession of Wirtschaftsprfer]), typically a course of university studies in business administration, although the WPO does not stipulate specific subjects - and also have had sufficient practical experience for the exercise of the profession (9 WPO). The profession of Wirtschaftsprfer is an academic profession. Besides auditing, the subjects covered during the Professional Examination include the core competences of the profession; primarily tax advice and the representation of clients in tax proceedings, as well as services in the capacity of a technical expert and consultant in all areas of business management. Practical experience: Practical work experience provides young Wirtschaftsprfer with the occupational skills that cannot, or cannot yet, be taught as part of a degree course. After gaining their degrees, university graduates must provide documentary evidence of their practical experience (work as auditors) totaling at least three years. When the prescribed degree course is shorter than eight semesters this is e xtended to four years. The work experience must be gained with a person, firm or auditing institution specified in [Article] 9(1) WPO, and Status as of Date of Publication Page 3 of 24

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certain activities outside auditing can be credited for up to one year. These include, e.g., working for the WPK, IDW, Deutsches Rechnungslegungs-Standards Committee [Accounting Standards Committee of Germany DRSC], the audit office for accounting or in a Prfungsverband [Cooperative Audit Association] pursuant to [Article] 26(2) 2 Kreditwesengesetz [German Banking Law KWG], but also work as a Steuerberater [German tax advisor] or auditor in a major company. Work experience acquired abroad will also be credited if it was obtained working for a person authorized or appointed as a statutory auditor in the foreign country and if the preconditions for the authority or appointment are significantly equivalent to the relevant prov isions of the WPO. Within this period of work experience, each candidate must, for not less than two years, undertake audit work for a person, firm or institution authorized to carry out statutory audits (Wirtschaftsprfer, Wirtschaftsprfungsgesellschaften, vereidigte Buchprfer, Buchprfungsgesellschaften; audit institutions that employ Wirtschaftsprfer), and during this period partic ipate predominantly (for not less than 53 weeks) in statutory audits and in drawing up long-form audit reports. 1.3 Other qualification routes The typical education route is via university degree. However, the WPO does permit exceptions whereby evidence of defined pra ctical work, supplemented by other professional qualifications, where applicable, can compensate for the absence of a university degree. 1.4 The new educational route Master's degree pursuant to [Article] 8a WPO Until recently, no university studies in Germany were available which would lead directly to the profession of Wirtschaftsprfer. The Wirtschaftsprfungsexamens-Reformgesetz [German Law Reforming the Examination of Wirtschaftsprfer Candidates] has paved the way for a degree course to train Wirtschaftsprfer. This degree course is subject to special accreditation. A master's degree course that has been accredited pursuant to [Article] 8a WPO provides training directed towards working as a Wirtschaftsprfer. The entrance requirements are a relevant first degree, ideally a bachelor's degree in business administration, at least one year's work experience in auditing as well as passing an entrance examination. The two-year master's degree is characterized by a high level of practical orientation. The course content is aimed towards preparing students for work as auditors and the Professional Examination. Candidates are entitled to sit the Wirtschaftsprfer Professional Examination upon successful completion of this master's degree programme. Candidates may sit the examinations directly following the completion of their master's degree. The results of the examinations on applied business administration/economics and commercial law sat as part of this degree program are accredited as equal in the Wirtschaftsprfer Professional Examination exempting candidates from the corresponding examinations. Thus, the Wirtschaftsprfer Professional Examination is limited to two subject areas, for which two written examinations and an oral examination are obligatory. The Wirtschaftsprfungsexamens-Anrechnungsverordnung (WPAnrV) [Professional Examination Accreditation Regulations] regulates procedural details. The reference framework and the curricula pursuant to the WPAnrV set forth the required content of the master's program. An official appointment as a Wirtschaftsprfer cannot take place immediately such Status as of Date of Publication Page 4 of 24

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candidates have passed the Professional Examination, because there is a requirement for at least three years' work experience. However, the entire period of work experience gained subsequent to the bachelor's degree having been awarded, is accredited as practical experience. 2. Professional Examinations 2.1 Typical examination route The Professional Examination, held twice-yearly, comprises written and oral examinations. Written examinations, which are uniform throughout Germany, are held in February and August each year. The WiPrPrfV [Wirtschaftsprferprfungsverordnung - Professional Examination Regulations] regulates the details of the examination pr ocedures. 2.2. Professional Examination requirements The content of the Wirtschaftsprfer Professional Examination are stipulated in [Article] 4 WiPrPrfV. 2.3 Professional Examination requirements: [Articles] 4 and 7 WiPrPrfV (subjects and number of written examinations): Auditing of businesses, business valuation and professional regulations Applied business administration, economics Commercial law Tax law The joint WPK/DW working party dealing with the reform of the Wirtschaftsprfer Professional Examination has produced a document establishing the detailed content of the syllabus for each subject covered in the Professional Examination. 2.4. Abridged Professional Examination As explained above, the Wirtschaftsprfungsexamens-Reformgesetz [Professional Examination Accreditation Regulations WPAnrV] created the possibility to accredit certain examination results gained during a university degree course. However, the achievements at university have to be equal to the requirements in the Professional Examination. This then leads to exemption from the written and oral examinations on the respective subject. Accreditation is only permissible for two subjects: applied business administration/economics and commercial law. The WPO provides for alternatives in this respect: Status as of Date of Publication Page 5 of 24

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The successful completion of a master's degree program accredited under [Article] 8a WPO exempts candidates from two subjects: applied business administration/economics and commercial law in the Professional Examination, which means that the Professional Examination is limited to two subjects for each of which candidates have to sit two written e xaminations and an oral examination. Under [Article] 13b WPO, examination results achieved during a university degree course (e.g., a diploma, bachelor's, master's degree course or in a course concluded by a state examination) can be accredited provided the Examination Unit has determined their equivalency in terms of content, form and scope. 7 et seq. WPAnrV sets forth preconditions in respect of form and content for establishing equivalency and also regulates the procedure. Prior to the start of each semester unive rsities may apply, in advance, to the Examination Unit for confirmation that the respective written and oral examinations they plan a s accreditable are equal to those of the Professional Examination. The degree course relevant to such accreditation has to have been successfully completed no longer than six years prior to the date of admission to the Professional Examination. An abridgement pursuant to [Article] 13 WPO (for German tax advisors) may be claimed together with an abridgement pursuant to 13b WPO (recognized equivalent examinations). An abridgement in accordance with 13 WPO is, however, not relevant for the training route in accordance with 8a WPO. 2.5 Examination Unit for the Professional Examination at the WPK Applications for admission to the Professional Examination have to be submitted to that WPKs state office at which the examination candidate wishes to sit the written and oral examinations. The office chosen cannot be changed during the examination process. Written examinations, which are uniform throughout Germany, are held in February and August each year. 2.6 Preparing for examinations The IDW Akademie offers various courses and training seminars etc. to guide students through their practical work experience, prepare them for the Professional Examination or revise and update the technical knowledge required for these examinations. Training in parallel to work experience As explained below, the IDW Akademie offers training courses specially for beginners once cand idates have begun their employment with a member of the profession. The training courses run alongside work experience and concentrate on the key areas Wirtschaftsprfer deal with day-to-day, covering auditing, taxation, business administration and law. These courses aim to revise, deepen and extend the basic knowledge candidates have acquired during their university education as well as imparting important practical knowledge.

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3 Aptitude test for statutory auditors from EU/EEA Member States or Switzerland ( [Articles] 131g ff. WPO A citizen of a member state of the European Union or another treaty nation in the European Economic Area or of Switzerland, who has earned a qualification from a member state of the European Union or treaty nation in the European Economic Area or Switzerland that confers upon the holder all the requirements necessary to immediately carry out audits of financial statements as defined by Article 2 No. 1 of the Directive 2006/43/EEC of the European Parliament and of the Council of 17 May 2006 on Statutory Audits of Annual Accounts and Consolidated Accounts, amending Council Directives 78/660/EEC and 83/349/EEC and repealing Council D irective 84/253/EEC (Official Journal of the European Union No. L 157 p. 87) in this member state or in another treaty nation in the European Economic Area or Switzerland, can be appointed as Wirtschaftsprfer, provided that citizen has passed an aptitude test as Wirtschaftsprfer. Thus a professional qualification comparable to that of the Wirtschaftsprfer acquired in a Member State of the EU, the EEA or Switzerland, entitles citizens of these states to sit the aptitude test. Upon application and payment of a fee, the Examination Unit provides binding information on compliance with the admission requirements. The aptitude test is an independent examination, but is abridged in comparison with the standard Professional Examination, because applicants already have a comparable professional qualification. Those German statutory regulations that are important for exercising the profession constitute the subjects e xamined. These include provisions of tax law, commercial law and the regulations governing the profession of Wirtschaftsprfer. The aptitude test consists of a written examination comprising two papers and an oral examination, all of which are held in German. The procedure corresponds largely to that of the Professional Examination. The examination is he ld once each year. Details are regulated in [Articles] 25 to 34 of the Wirtschaftsprferprfungsverordnung [Professional Examination Regulations - WiPrPrfV]. Examination tutoring on a voluntary basis for the final assessment (WP -Exam), in which most examination candidates participate, usually requires an additional 1 or 2 years of part-time study during the period of practical work experience. Courses are provided by the IDW as well as by private organizations. However, it is not the responsibility of the IDW to suggest how such professional programs should be organized or to ensure their relevance and quality. IDW Study courses in preparation for the Professional Examination The IDW Akademie holds study courses especially for candidates preparing for the Professional Examination. These courses convey the teaching material for the required examination fields for the Professional Examination, with the exception of tax law. The latter is not covered, because approximately 85% of all candidates are eligible to waive the tax law examinations on the basis that they have already acquired their qualification as a tax advisor. The course comprises a total of 10 weeks. As a supplement to this, the IDW Akademie offers a one-week course on how to write written examinations in commercial law to enable candidates, the majority of whom are oriented to economics, to practice preparing written papers in law. Status as of Date of Publication Page 7 of 24

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Other specialist events organized by the IDW: In addition, examination candidates can attend specific events organized by the IDW dealing with current questions pertaining to the day-to-day work of the Wirtschaftsprfer such as lectures and talks organized by the IDW's state groups. All written assessment questions in the Professional Examination are set by a special commission (Aufgabenkommission) with 9 members coming from different sectors. 7 of them are non-practitioners and come from the following sectors: State Ministries, examination unit of WPK, universities, lawyer, tax administration, industry). 2 members are practitioners (WPK members). All markers are members of the Examination Commission (Prfungskommission) and come from the above-mentioned sectors (with one exception: there is no representative of the examination unit of WPK in the Examination Commission). Members of both commissions are appointed by the WPK Council. This appointment needs the consent of the Federal Ministry of Economics. The requirement for continuing professional development is established through different laws / bylaws: Wirtschaftsprferordnung WPO Public Accountants' Law, WPK Bylaws, and with respect to IDW, the IDWs Articles of Incorporation Once a person is an IDW member, each member is required to ensure that their C ontinuous Professional Development (CPD) meets their professional practice needs. IDW requires 40 hours a year. Maintaining Ongoing Processes Ongoing information to IDW members in respect of new developments in IAESB pronouncements 2. Ongoing Include a commentary on each new pronouncement Ongoing issued by International Accounting Education Standards Board (IAESB) in the monthly members journal and the fortnightly technical magazine, so as to: a) inform members of new developments; and b) solicit members input for comment letters to the IAESB. IDW Executive Board IDW Technical Staff

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Action Plan Developed by Institut der Wirtschaftsprfer (IDW) # 3. Start Date Ongoing Actions Include a summary of each comment letter submitted by IDW relating to pronouncements issued by IAESB in the monthly members journal and the fortnightly technical magazine. Full text of the letters is made available on IDW website. Report new pronouncements in news flash on our website. Completion Date Ongoing Responsibility IDW Executive Board Resource IDW Technical Staff

4.

Ongoing

Ongoing

IDW Executive Board

IDW Technical Staff

Incorporate the essential elements of IES 5. Ongoing Entrance requirements for the qualification and the professional examination are regulated by law. The regulations comply with International Education Standards (IES). Ongoing The German legislator is responsible for passing the relevant law and regulation. IDW uses its best endeavors to persuade the regulator to pass laws and regulations in accordance with the IES.

Assist with the implementation of IES Ongoing 6. 7. Ongoing Approval of curricula (the curricula are made publicly available). Approval of the Referenzrahmen(frame of reference that provides details about the examination subjects of certain university degrees, which may be accredited towards the professional examination). Ongoing IDW Executive Board Ministry of Economics and Technology IDW Technical Staff

Ongoing

IDW Technical Staff

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Review of IDWs Compliance Information 8. Ongoing The IFAC self-assessment questionnaires and this Action Plan will be reviewed periodically and updated as necessary by the staff responsible for the relevant area of activity. Ongoing IDW Executive Board IDW Technical Staff

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Action Plan Developed by Institut der Wirtschaftsprfer (IDW) Action Plan Subject: Action Plan Objective: # Start Date SMO 3 - International Auditing and Assurance Standards Continue to use best endeavors to adopt and implement ISAs and other IAASB Pronouncements Actions Completion Date Responsibility Resource

Background: Specific auditing standards are promulgated by the Institut der Wirtschaftsprfer (IDW). International Auditing and Assurance Standards Board pronouncements are transposed into national standards and amended as necessary to address differences due to conflicts with legal or regulatory requirements and to address matters of national professional practice. In the past, national standards were created based upon a line-by-line analysis of the ISAs. Differences resulted from legal and regulatory requirements and professional practice. In view of the potential adoption of ISAs by the EU, the IDW Auditing Standards are in the process of being amended to reflect the key changes resultant form revisions and redrafting of ISAs undertaken as part of the Clarity Project. The IDW supports the adoption of ISAs for application in the European Union. ISA adoption in the EU might be imminent. However, the EU Commission has not yet reached a decision as to whether the ISAs will be applicable throughout the EU on a mandatory basis. The EU Commission issued a green paper on auditing in October 2010, which raised this as one issue they may address. The Commission currently plans to announce measures it will pursue in November 2011, so, at present, it is unclear whether ISA adoption will be on the agenda or not. In the meantime, the IDW will continue to transpose ISAs into national auditing standards as previously reported. Given the delayed decision from the EU Commission on ISA adoption, the IDW is continuing to update its auditing standard to transpose the ISAs, concentrating on requirements that were not previously clearly denoted as such, as well as new requir ements to revised ISAs. This exercise is ongoing, although it has been substantially completed. The IDW has recently issued an assurance standard: IDW Assurance Standard: Principles for the Proper Performance of Reasonable Assurance Engagements Relating to Compliance Management Systems (IDW AssS 980). Recent changes to legislation in Germany concerning corporate governance have contributed to an increasing recognition of the need for entities to take distinct steps to ensure that their business behavior is satisfactory from a social and legal vie wpoint. Many entities have adopted or established frameworks and principles designed to govern the behavior of their management and employees, and, in some cases, where applicable, third parties involved with the entitys business processes. Based thereon, suc h entities have introduced, Status as of Date of Publication Page 11 of 24

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or are in the process of introducing systems to ensure that their own behavior does not contravene specific requirements, such as laws, regulations and the entitys own internal standards (compliance management systems CMS). There is a corresponding demand from entities to have independent practitioners provide a conclusion on specific aspects of their CMS, either during the design and set up phases or as to their subsequent operation, both for internal and, in case of the latter, external purposes. The IDW Assurance Standard has been issued in response to this demand. However, it is important to stress that an assurance engagement pursuant to IDW Assurance Standard 980 is neither directed at the detection of single instances of non-compliance nor to providing comfort that no such instances have occurred. Maintaining Ongoing Processes Ongoing information to IDW members in respect of new developments in IAASB pronouncements 9. Ongoing Include in the monthly members journal and also the fortnightly technical magazine a commentary on each new exposure draft issued by the IAASB, so as to: a) inform members of new developments and/ or proposed changes; and to b) solicit members input for comment letters to the IAASB. Include in the monthly members journal and fortnightly technical magazine a summary of each comment letter submitted by the IDW relating to exposure drafts issued by the IAASB, so as to inform members as to the main issues raised. Full text of letters available on IDW Website. Report new pronouncements in news flash on our Website issued in final form to inform members. Ongoing IDW Executive IDW Technical Staff Board

10.

Ongoing

Ongoing

IDW Executive IDW Technical Staff Board

11.

Ongoing

Ongoing

IDW Executive IDW Technical staff Board Page 12 of 24

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Participation in IAASBs Standard Setting Activities 12. Ongoing Agenda papers are reviewed and significant issues identified and included in German in the agenda papers presented for discussion at the IDW main technical Board meeting [Hauptfachausschuss (HFA) Auditing and Accounting Board]. Prospective German IAASB members are also members of the HFA, whose meetings are attended by others with an interest in auditing standard setting (e.g. representatives of the German Chamber of Public Auditors and the German Auditor Oversight Commission). This enables a discussion of significant issues, so informing the IAASB member as to the views of the German profession and others on specific issues. As there are currently no members in the IAASB from Germany, the IDW sponsors members in the IAASB Review and Compilations and ISAE 3000 Task Forces. Due to the current absence of a German IAASB member, the former Technical Advisor attends each IAASB meeting as an observer. Ongoing IDW Technical IDW Technical Staff Department together with Departmental Head

13.

Ongoing

Ongoing

IDW Executive IDW Auditing and Board Accounting Board

14.

Ongoing

Ongoing

IDW Executive IDW Director International Board Affairs

Translation of the International Standards

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Action Plan Developed by Institut der Wirtschaftsprfer (IDW) # 15. Start Date Ongoing Actions Translation of IAASB pronouncements (in preparation for EU adoption) (this also familiarizes the Working Party with final versions knowledge gained is also applied in updating IDW Auditing Standards) Translation of ISAs and ISQC 1. Completion Date Completed July 2011 Responsibility Principal Translator and IDW Working Party ISA Transposition with acknowledgement of IDW Auditing and Accounting Board IDW Auditing and Accounting Board Resource IDW Working Party ISA Transposition and IDW Technical Staff

Updating German Auditing Standards to reflect developments in and/ or proposed changes to IAASB pronouncements 16. Ongoing For ISAs (Redrafted), amend corresponding individual IDW Auditing Standard such that all ISA requirements are reflected either implicitly or explicitly with the appropriate degree of authority (i.e., update to reflect present tense text elevated to requirements and any new requirements to the extent necessary to lead to the same conceived outcome). For ISAs (Revised and Redrafted) and new ISAs, update individual IDW Auditing Standards as necessary in addition to no. 9 above. Beginning 2010 IDW Working Party ISA Transposition and IDW Technical Staff

17.

Ongoing

Beginning 2010

IDW Auditing and Accounting Board

IDW Working Party ISA Transposition and IDW Technical Staff

Member education and training

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Action Plan Developed by Institut der Wirtschaftsprfer (IDW) # 18. Start Date Ongoing Actions Annual technical conference for IDW members includes a workshop IAASB Update, or similar title, to inform participants about and foster discussion of the more significant aspects. Updated IDW Auditing Standards are included in all relevant training courses offered by the IDW Academy to ensure members and trainees have up-to-date information. Completion Date Ongoing Responsibility Resource

IDW Academy IDW Technical Staff and IDW together with individual Executive lecturers Board IDW Academy IDW Technical Staff together with individual lecturers

19.

Ongoing

Ongoing

Handbooks and Manuals (including tools) 20. Ongoing Update annually IDW Practice Manual for Audit and Quality Control, including a software tool, checklists and other tools (designed for use by SMPs) to reflect changes in IAASB pronouncements that have affected the IDW Auditing Standards, and other changes (e.g., German law, etc.). Update members handbook [Comprehensive technical resource of relevant information for all areas of work performed by IDW Members covering accounting, auditing, tax and law] at regular intervals to reflect changes arising from the revision of IAASB pronouncements (e.g. changes in audit methodology and firms quality control, etc.). Ongoing IDW Executive IDW Technical Staff Board together with IDW Working Party on Quality Control

21.

Ongoing

Ongoing

IDW Executive IDW Technical Staff Board together with selected Member Experts

Technical Support for our Membership Status as of Date of Publication Page 15 of 24

Action Plan Developed by Institut der Wirtschaftsprfer (IDW) # 22. Start Date Ongoing Actions We offer members a telephone service whereby they may make oral inquiries on technical matters, including auditing. In addition, members may request written replies from our technical department on technical issues. Completion Date Ongoing Responsibility Resource

IDW Technical IDW Technical Staff Department together with Department Head

Lobbying in respect of ISA adoption by the EU 23. Ongoing Participation in various organizations and groups (e.g., Fdration des Experts comptables -FEE Europen, European Group of Auditors Oversight Bodies-EGAOB ISA Subgroup) and through contact with the German Government. Ongoing IDW Executive IDW Executive Directors, Board Technical Staff and selected Member Experts

Fostering ISA Acceptance 24. Ongoing Provide explanations of the ISAs in German language, including practical examples tailored to the German legal and economic environment for. specific issues or topics of practical relevance rather than individual ISAs are selected. The need for either translation or adaptation of other IFAC material is determined on a case by case basis. Started 2010 IDW Executive IDW Executive Directors, Board Technical Staff and selected Member Experts

25.

Ongoing

Ongoing

IDW Executive IDW Executive Directors, Board Technical Staff and selected Member Experts

Review of IDWs Compliance Information

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Action Plan Developed by Institut der Wirtschaftsprfer (IDW) # 26. Start Date Ongoing Actions The IFAC self-assessment questionnaires and this Action Plan will be reviewed periodically and updated as necessary by the staff responsible for the relevant area of activity. Completion Date Ongoing Responsibility Resource

IDW Executive IDW Technical Staff Board

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Action Plan Developed by Institut der Wirtschaftsprfer (IDW) Action Plan Subject: Action Plan Objective: # Start Date SMO 5 - International Public Sector Accounting Standards Activities to promote IPSASB Pronouncements Actions Completion Date Responsibility Resource

Background: Although public sector accounting standards are not within our scope of responsibilities, the IDW promotes International Public Sector Accounting Standards Board pronouncements through various activities explained in the table below. At the federal level, the German Central Government continues to apply cashbased, single-entry accounting. The IDWs best endeavours relate to regular meetings between the German IPSASB Board member and Technical Advisor to inform the Germany Ministry of Finance representative up to date as to the IPSASBs work program and to discuss matters of particular interest relating thereto. At the municipal level, as certain German States but not all have adopted accrual or modified accrual accounting. However this primarily follows private company accounting requirements as set forth in the German Commercial Code rather than International Financial Reporting Standards (IFRSs) or IPSASs. Maintaining Ongoing Processes Ongoing information to IDW members in respect of new developments in IPSASB pronouncements 27. Ongoing Information in IDW members journal, technical magazine or Website: reference to new IPSASB pronouncements summary of / link to each comment letter submitted by the IDW relating to exposure drafts issued by the IPSASB (full text of letters available on IDW Website) articles about international developments Ongoing IDW Executive IDW Technical Staff and Board IDW Committee members

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Participation in IPSASB Standard Setting Activities 28. Agenda papers are reviewed and significant issues identified. The German IPSASB member is also a member of the IDW Public Sector Committee, whose meetings are attended by others with an interest in public sector accounting and auditing standard setting (e.g. representatives of Ministries). This enables a discussion of significant issues, so informing the IPSASB member as to the views of the German profession and others on specific issues. 29. Ongoing The IDW provides the German IPSASB member with the services of a Technical Advisor who also attends the meetings of the IDW Public Sector Committee and related Working Parties. Comment letters submitted by the IDW relating to IPSASB exposure drafts are developed in the IDW Public Sector Committee and related Working Parties in which practitioners and other stakeholders contribute Ongoing IDW Executive IDW Technical Staff Board IDW Executive IDW Technical Staff and Board IDW Committee members

30.

Ongoing

Ongoing

IDW Executive IDW Technical Staff and Board IDW Committee members

Continuing education of members

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Action Plan Developed by Institut der Wirtschaftsprfer (IDW) # 31. Start Date Ongoing Actions Annual technical conference for IDW members includes workshops for developments in the Public Sector (including IPSASB activities) to inform participants about and foster discussion of significant aspects. Completion Date Ongoing Responsibility Resource

IDW Academy IDW Technical Staff and IDW together with individual Executive lecturers Board

Technical Support for our Membership 32. Ongoing We offer members a telephone service whereby they may make oral inquiries on technical matters, including public sector accounting and auditing. In addition, members may request written replies from our technical department on technical issues. Ongoing IDW Technical IDW Technical Staff Department

Promoting IPSASB pronouncements with those responsible for public sector accounting standard-setting 33. Ongoing Although IDW is not standard-setter for public sector accounting standards, IDW promotes IPSASB pronouncements by reference to them in meetings with different institutions, e.g. ministries and courts of audit. Ongoing IDW Executive IDW Executive Directors, Board Technical Staff and selected Member Experts

Review of IDWs Compliance Information 34. Ongoing The IFAC self-assessment questionnaires and this Action Plan will be reviewed periodically and updated as necessary by the staff responsible for the relevant area of activity. Ongoing IDW Executive IDW Technical Staff Board

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Action Plan Developed by Institut der Wirtschaftsprfer (IDW) Action Plan Subject: Action Plan Objective: SMO 7 - International Financial Reporting Standards Continue to use best endeavors to support adoption and implementation International Financial Reporting Standards Actions Completion Date Responsibility Resource

Start Date

Background: Listed companies in Germany are required to use International Financial Reporting Standards (IFRSs) in their conso lidated accounts as required by the European Commission (EC) Regulation No. 1606/2002. Germany permits IFRSs in the annual and consolidated accounts of all types of companies for information purposes only, and these entities are required to prepare (nonconsolidated) annua l financial statements in accordance with national accounting law for purposes of profit distribution, taxation, and financial services supervision. German accounting requirements, which are primarily contained in the German Commercial Code (HGB), differ from IFRSs. However, the German Ministry of Justice issued the German Accounting Law Modernization Act in which came into force on May 29, 2009, which modernizes the HGB, reduces the regulatory burden on companies, and in general achieves closer alignment with IFRSs. In light of the afore-mentioned modernization of German accounting law, the IDW does not support the application of IFRSs for SMEs in Germany at the present time as the costs of the adoption of these would exceed the benefits for SMEs because of the relationship between company law and tax law and German accounting. Nevertheless, the IDW supports efforts by the European profession to endeavor to have the Fourth and Seventh EU Directives amended so that it is possible for business corporations to apply national accounting laws in the EU that permit compliance with IFRS for SMEs at the same time. Maintaining Ongoing Processes Ongoing information to IDW members in respect of new developments in IFRS 35. Ongoing Include in the fortnightly technical magazine a summary of each exposure draft, draft interpretation or discussion paper issued by the IASB or the IFRS Interpretations Committee, so as to: Ongoing IDW Technical Department IDW Technical Staff

Status as of Date of Publication

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Action Plan Developed by Institut der Wirtschaftsprfer (IDW) # Start Date Actions a) inform members of new developments and/ or proposed changes, and b) solicit members input for comment letters to the IASB or the IFRS Interpretations Committee. 36. Ongoing Include in the fortnightly technical magazine a summary of each comment letter submitted by the IDW relating to exposure drafts, draft interpretation or discussion paper issued by the IASB or the IFRS Interpretations Committee, so as to inform members as to the main issues raised. Full text of letters available on IDW Website. Include in the fortnightly technical magazine a summary of the final IFRSs (or amendments, respectively) to inform members of new developments that must be considered. Include in the fortnightly technical magazine articles on particular IFRS matters, mainly new pronouncements. Report certain IFRS news on our Website. Ongoing IDW Technical Department IDW Technical Staff Completion Date Responsibility Resource

37.

Ongoing

Ongoing

IDW Technical Department

IDW Technical Staff

38.

Ongoing

Ongoing

Individual authors

Individual authors

39.

Ongoing

Ongoing

IDW Technical Department IDW Auditing and Accounting

IDW Technical staff

Preparation of German application guidance on IFRS 40. Ongoing Develop and issue IDW Pronouncements on IFRS (IDW Accounting Principles and Accounting Practice Statements) to inform Ongoing IDW Committees IDW Technical staff

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Action Plan Developed by Institut der Wirtschaftsprfer (IDW) # Start Date Actions members of the views of the auditing profession / the IDW committees on particular IFRS matters. Include these pronouncements in the monthly members journal. Include a summary in the fortnightly technical magazine. IFRS-Knowledge Base 41. Ongoing Provide access to a comprehensive IFRS data base, including IFRSs, IDW pronouncements on IFRS, IDW comment letter on exposure drafts, draft interpretation or discussion paper issued by the IASB, literature, articles etc. Ongoing IDW Executive Board IDW Technical staff Completion Date Responsibility Board Resource

IFRS-Handbook: Synoptic translation 42. Ongoing Issue and update the full consolidated text of all IFRS as adopted in the EU. Synoptic presentation in English and German to facilitate the application of IFRS for Germa n constituents. Ongoing N/A IDW Technical staff

Member education and training 43. Ongoing Technical conferences for IDW members on IFRS topics to inform participants and foster discussion. Ongoing IDW Academy Individual lecturers

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Action Plan Developed by Institut der Wirtschaftsprfer (IDW) # 44. Start Date Ongoing Actions Telephone service whereby members may make oral inquiries on technical matters. In addition, members may request written IFRS replies on technical issues. Completion Date Ongoing Responsibility Resource

IDW Technical IDW Technical Staff Department

Lobbying in respect of IFRS 45 Ongoing Participation in various organizations and groups (e.g., FEE, German Accounting Interpretations Committee) and through contact with the German Government. Ongoing IDW Executive IDW Executive Directors, Board Technical Staff and selected Member Experts

Review of IDWs Compliance Information 46. Ongoing The IFAC self-assessment questionnaires and this Action Plan will be reviewed periodically and updated as necessary by the staff responsible for the relevant area of activity. Ongoing IDW Technical Department IDW Technical Staff

Status as of Date of Publication

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