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Germany / Federal Administrative Court / 10 C 24/14

Unknown self-employed auditor v Auditors Chamber

Policy area:
Employment and social policy
Deciding Body type:
National Court/Tribunal
Deciding Body:
Federal Administrative Court
Decision date:

Key facts of the case: 

The plaintiff, a self-employed auditor (Wirtschaftsprüfer) and lawyer, challenged the decision of the Auditors’ Chamber (Wirtschaftsprüferkammer) which decided that the plans of the plaintiff to become chair of the board of a Swiss company are not compatible with the professional integrity and duties of an auditor: The plaintiff is a registered auditor in several EU Member States and in Switzerland. In October 2013 he informed the chamber about his plans to become chairman of the board of a Swiss company, in which he should have a merely supervising function. The chamber, however, decided that such a chairmanship is a commercial function, violating the professional duties of an auditor laid down in Section 43a (3) of the Auditors Regulation (Wirtschaftsprüferordnung). The chamber therefore decided that the plaintiff must not take over the chairman function while working as auditor. Against this decision the plaintiff lodged a complaint with the competent administrative court, which was dismissed. Againt this this court decision the plaintiff appealed to the Federal Administrative Court (Bundesverwaltungsgericht), by arguing that his fundamental human rights are violated, especially his right to engage in work and the freedom to conduct a business. The leapfrog appeal was dismissed as being unfounded. The Federal Administrative Court upheld the first instance’s decision by explaining that the striven chairmanship of the board is subject to the prohibition of commercial activities laid down in Section 43a (3) of the Auditors Regulation.

Outcome of the case:

The plaintiff’s leapfrog appeal was not successful. The Federal Administrative Court decided that the Auditors Chamber did not violate the fundamental rights of the plaintiff (besides national law also Articles 15 and 16 of the Charter) by applying Section 43a (3) of the Auditors Regulation. The court argues, that the obligation to respect fundamental rights defined in the context of the European Union is binding upon the member states only in respect of matters covered by EU law. The court rejected the argument of the plaintiff that Directive 2006/43/EC on  statutory  audits  of  annual  accounts  and  consolidated  accounts makes the Charter relevant for his case. The court argued that Directive 2006/43/EC  only determines rules for audits but not for the auditors and does not contain rules concerning the compatibility of commercial activities and auditing. Therefore, EU Member States may create their own rules on this the matter without implementing EU law.