PracticeConsultingFinance directors slam German accounting standards

Finance directors slam German accounting standards

German accounting standards have a distorting influence on company results, according to a survey of finance directors.

A survey published by Exact Software UK, an ERP vendor, found that, whereas US and French standards were felt by respondents to be particularly difficult to comply with, it was German financial reporting legislation that presented the most significant challenges for managers in understanding their international subsidiaries.

Of respondents who answered the question: ‘Which national standards cause the most problems in presenting a fair picture of your business?’, 41 per cent mentioned Germany. A quarter of respondents found French accounting standards particularly distorting. Italy and the United States came in equal third place, with 16 per cent of respondents identifying those two countries.

Andrew Kehoe, Senior Consultant at Exact Software commented: ‘A surprisingly large number of British companies do not find understanding the performance of their subsidiaries in Germany, France or Italy not at all easy.

‘This is worrying when you consider how much effort goes into the standardisation of practices between EU partners and how much integration is taking place in the Single Market.

‘The Exact survey illustrates starkly the problems that finance directors face when managing multi-national companies and highlights a challenge, for UK managers, but also for EU legislators.’

Other results from the survey include:

Accounting standards in the US and France are the most difficult to comply with. 4

49 per cent of companies have separate accounting IT systems in each subsidiary and only 30 per cent of companies operate a single system to collect and report their financial management information. Incredibly, 22 per cent of finance directors surveyed were unable to name or categorise which system was used across the group as a whole.

The average time for consolidation of financial results across an international company was 8 days.

Exact Software UK contacted 76 Finance Directors or equivalent, operating in companies with international subsidiaries, in November 1999.

German accounting rules cost Rover £230m

IAS delay damns Rover

Review of 1999: STANDARDS

Related Articles

5 tips for SMEs to protect cash flow

Accounting Software 5 tips for SMEs to protect cash flow

5m Alia Shoaib, Reporter
Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

Consulting Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

11m Stephanie Wix, Writer
Managing partner Q&A - the year ahead: Richard Toone, CVR Global

Accounting Firms Managing partner Q&A - the year ahead: Richard Toone, CVR Global

12m Kevin Reed, Writer
Deloitte 'self-imposes exile' on government contracts to defuse PM row

Accounting Firms Deloitte 'self-imposes exile' on government contracts to defuse PM row

12m Kevin Reed, Writer
Managing partner Q&A - the year ahead: Julie Adams, Menzies

Accounting Firms Managing partner Q&A - the year ahead: Julie Adams, Menzies

12m Kevin Reed, Writer
Friday Afternoon Live: Deloitte's tech thing; PAC wants HMRC 'contingencies'; and Sports Direct

Business Regulation Friday Afternoon Live: Deloitte's tech thing; PAC wants HMRC 'contingencies'; and Sports Direct

1y Kevin Reed, Writer
Friday Afternoon Live: HMRC complaints rise; Deloitte scoops big audits; and corporate reporting woes

Audit Friday Afternoon Live: HMRC complaints rise; Deloitte scoops big audits; and corporate reporting woes

1y Kevin Reed, Writer
New head of equity capital markets for KPMG

Accounting Firms New head of equity capital markets for KPMG

1y Stephanie Wix, Writer