Private Equity:
Statement by the Board of Management [Vorstand] of the German Chamber of Public Accountants [WPK] on the Audit Market

Recently, there have been repeated transactions in the market relating to ownership interests in audit firms involving private equity.

Following thorough discussions weighing the pros and cons, the Board of Management of the WPK issues the following statement:

European audit firms may, in accordance with the EU Audit Directive 2006/43/EU and the German Public Accountant Act [Wirtschaftsprüferordnung], acquire interests in German audit firms. Due to varying implementation of the EU Audit Directive across member states, private equity firms are able to make indirect investments in German audit firms via EU-based audit firms.

Professional principles must not be compromised

As with all legal or factual changes in the profession, indirect private equity ownership in professional firms is subject to the condition that it does not call into question the fundamental professional principles—particularly independence, conscientiousness, confidentiality, and self-responsibility as core elements of liberal professions, the responsible management of firms by professional accountants, and the quality of professional services.

The high national level of independence and the trust in the profession's integrity are non-negotiable.

WPK monitors compliance with European and national regulations

The profession of auditors already has a well-developed framework to ensure compliance with professional duties.

The Board of Management therefore supports a review by the Membership Department—and if necessary, by the Commission on Quality Assurance [Kommission für Qualitätskontrolle] and the Disciplinary oversight [Berufsaufsicht der WPK] —to assess whether firms with indirect private equity participation  comply with the various applicable European and German rules: from the EU Audit Regulation to the Public Accountant Act [Wirtschaftsprüferordnung], the Professional Charter [Berufssatzung WP/vBP], as well as relevant standards and best practices.

Any firm considering such participation must thoroughly assess the advantages and disadvantages of private equity involvement, pay close attention to the implications for internal independence checks and quality assurance systems, and make adjustments where necessary.

The Board of Management will closely monitor further developments and continually evaluate whether legislative or professional responses are needed—particularly in the areas of independence, transparency, European market competition (level playing field), or the regulatory obligations of private equity investors.