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Standard Terms and Conditions of Fabel Werner & Schnittke GmbH as of 1. November 2003



1. Scope

(1) These General Terms and Conditions shall apply to contracts between the company Fabel Werner & Schnittke GmbH, hereinafter called “the Auditing Firm“, and its clients for audits, consultations and other engagements, unless otherwise explicitly agreed upon in writing or prescribed by law.

(2) If, in an individual case, as an exception contractual relations are entered into between the Auditing Firm and persons other than the client, the provisions of item 7 below shall also apply to such third parties.


2. Scope and Performance of Engagements

(1) The subject matter of the engagement shall be the agreed upon service, not a particular economic result. The engagement shall be performed according to the principles of professional practice. The Auditing Firm shall be entitled to avail itself of experts for performing the engagement.

(2) The client shall receive a written confirmation of the engagement from the Auditing Firm.

(3) The rendering of the service shall be confirmed by documents of delivery.

(4) The engagement shall not comprise, to the extent this is not included therein, the examination of whether the regulations of tax law or special regulations, such as the regulations of the law on price controls, the law limiting competition and the law concerning certain aspects of specific business operations (Bewirtschaftungsrecht), are complied with; the same shall apply to the determination of whether subsidies, allowances or any other special benefits may be claimed. The performance of an engagement shall only comprise auditing procedures aimed at the detection of the falsification of books and records and other irregularities in the event grounds for this arise during the conduct of audits or if this has been expressly agreed upon in writing.

(5) In particular, the Auditing Firm shall not be liable for any subsequent payment of taxes.

(6) If the legal situation changes after the issuance of the final professional statements, the Auditing Firm shall not be obliged to inform the client of such changes or any consequences resulting therefrom.

(7) It is expressly pointed out that the service rendered in the respective countries where the audit takes place does not constitute an audit according to the rules of organisation of auditors and public accountants in Germany. The services rendered are audits of the annual accounts prepared with the participation of German and foreign auditors. However, unless agreed otherwise for the specific engagement, the services shall in any case be rendered within the framework of the International Standards on Auditing, issued by the International Federation of Accountants (IFAC).


3. Client’s Obligation to Give Information

The client shall see to it that, without the Auditing Firm’s special request, the Auditing Firm receives all documents that are necessary for the performance of the engagement and that it is notified of all occurrences and circumstances that may be of importance for the performance of the engagement. This shall also apply to documents, occurrences and circumstances that only become known to the Auditing Firm during the course of its activities.


4. Ensuring Independence

The client undertakes to refrain from any action that may endanger the independence of the Auditing Firm’s staff.
This shall apply in particular to offers of employment and offers to take on engagements on their own account.


5. Protection of the Auditing Firm’s Intellectual Property

The client shall guarantee that expert opinions, organisational charts, drafts, sketches, schedules and calculations, including, but not limited to quantity and cost accounting, that are prepared by the Auditing Firm within the scope of its engagement are only used for the client’s own purposes.


6. Disclosure of a Professional Statement of the Auditing Firm

(1) The disclosure of professional statements of the Auditing Firm (reports, expert opinions and the like) to any third party shall be subject to the Auditing Firm’s written consent, unless the prior consent to the disclosure vis-à-vis a certain third party ensues from the engagement terms.
The Auditing Firm shall only be liable to third parties (within the limits of item 7) if the prerequisites of the above sentence are given.

(2) The use of any of the Auditing Firm’s professional statements for advertising purposes shall not be permitted; any infringement shall entitle the Auditing Firm to terminate without notice all contracts with the client that have not been completed.


7. Liability

(1) Liability in Case of Negligence; Individual Case of Damage

If there is no regulation in the individual case the Auditing Firm’s liability for damage claims of any kind for an individual case of damage resulting from negligence shall be limited to three times the amount of the fee. This shall also apply in case any liability vis-à-vis a third party other than the client should be established. A uniform damage arising from a number of breaches of duty shall also constitute an individual case of damage. The individual case of damage shall comprise all consequences of a breach of duty irrespective of whether the resulting damage occurred in one or a number of consecutive years. In this case multiple acts or omissions based on a similar source of error or on a source of error of an equivalent nature shall be deemed to be a uniform breach of duty if the matters in question are legally or economically connected to one another.

(2) Preclusive time limits

A claim for damages may only be asserted within a preclusive time limit of 6 months after the rightful claimant has gained knowledge of the damage and the damaging event. The claim shall lapse if no legal action is taken within a period of 6 months after the written refusal of any compensation and this consequence has been pointed out to the client. Sentences 1 and 2 above shall also apply in case of audits prescribed by law with a statutory limitation of liability.


8. Supplementary Stipulations for Audit Engagements

(1) Any subsequent amendment or abridgement of the annual accounts or status reports audited and certified by the Auditing Firm shall be subject to the prior written consent of the Auditing Firm, even if these documents are not published. In case the Auditing firm has not issued an audit certificate, a reference to the audit conducted by the Auditing Firm in the status report or elsewhere intended for the general public shall only be admissible with the Auditing Firm's prior written consent and using the wording authorized by it.

(2) In the event the Auditing Firm revokes the audit certificate the audit certificate may no longer be used. In the event the client has already made use of the audit certificate he shall be obliged to announce its revocation upon the Auditing Firm’s request in order to guarantee that the same group of persons that has received the original audit certificate will also receive its revocation.

(3) Obligation of any third party to be audited

In case the organisation to be audited is not identical with the client, it shall be the client’s duty to oblige such third party to meet all obligations ensuing from these Standard Terms and Conditions and the contract. To this extent the client shall also be liable vis-à-vis the Auditing Firm for any breach of contract by such third party.

(4) If the audit does not take place at the Auditing Firm’s place of business, the client shall arrange for the Auditing Firm to be able to use the office equipment (fax, e-mail, photocopier) available at the location of the audit free of charge in connection with performing this engagement. Furthermore any travel expenses and per-diem allowances for the persons commissioned with the performance of the engagement shall be borne by the client upon the presentation of invoices, unless the individual engagements do not provide otherwise.

(5) The Auditing Firm shall prepare an audit report that is intended for the client. Furthermore the Auditing Firm shall prepare a management letter that will provide information on the efficiency of the organisation or parts of the organisation and potential shortcomings and that is only intended for the client. Any additional copies shall be charged for separately.

(6) The Auditing Firm shall submit to the client one copy of the audit report and the management letter in the language of the client. A translation into other languages shall be subject to a separate agreement.


9. Professional Confidentiality vis-à-vis Third Parties, Data Protection

(1) Pursuant to the statutory provisions the Auditing Firm is obliged to keep confidential all facts that it becomes aware of in connection with its activities for the client, irrespective of whether those concern the client itself or his business relations, unless the client releases the Auditing Firm from this obligation.

(2) The Auditing Firm shall not be entitled to make available reports, expert opinions or any other written statements on the results of its activities to any third parties without the client’s prior consent.

(3) The Auditing Firm shall be authorised to process personal data entrusted to the Auditing Firm in connection with the purpose stipulated by the client or have such data processed by third parties.


10. Default of Acceptance and Failure to Assist on the Part of the Client

In the event the client defaults in accepting the services offered by the Auditing Firm or fails to provide the assistance incumbent upon the client pursuant to item 3 or otherwise, the Auditing Firm shall be entitled to terminate the contract without notice. The Auditing firm’s right to compensation for additional expenses caused by the default or the failure to assist on the part of the client as well as for the resulting damage shall not be affected hereby, even if the Auditing Firm does not exercise its right of termination.


11. Remuneration

(1) In addition to its claims for fees or remuneration the Auditing Firm shall be entitled to be reimbursed for its expenses.
It may claim appropriate advances on its remuneration and the reimbursement of expenses and make the rendering of its services dependent upon the complete satisfaction of its claims.  Several clients shall be jointly and severally liable.

(2) Any setoff against the Auditing Firm’s claims for remuneration or the reimbursement of expenses shall only be admissible for claims that are undisputed or final and absolute.


12. Period for Payment and Arrears

The period for payment shall be 90 days, calculated from the date of delivery of the reports, and in case of arrears interest on arrears shall accrue at a rate of 0.1 % per calendar day. In other respects, payments shall be due and payable immediately unless agreed otherwise.


13. Termination of the Contract

(1) The client’s right to terminate the contract

The client may terminate the contract immediately for serious reasons. No obligations shall ensue for the client from payments already made.

(2) The Auditing Firm may terminate the contract immediately if the client infringes the contract, is insolvent or jeopardizes the independence of the Auditing Firm.
In this case, the Auditing Firm shall not be obliged to return any payments already received.


14. Preservation and Return of Records

(1) The Auditing Firm shall preserve the documents provided to the Auditing Firm or issued by it in connection with the performance of its engagement as well as the correspondence concerning the engagement for a period of three years.

(2) After the settlement of its claims in connection with the engagement the Auditing Firm shall, upon the client’s request, return all documents that it has received due to its activity for the client from or on behalf of the client. However, this shall not apply to the correspondence between the Auditing Firm and its client and to documents of which the latter already possesses the original or a copy. The Auditing Firm may make and retain copies or photocopies of the documents that it returns to the client.


15. Applicable Law and Place of Jurisdiction


Unless agreed otherwise German law shall apply exclusively to the engagement, its performance and the claims resulting therefrom. Place of jurisdiction shall be the client’s place of business.