A single error or tampered document can become a costly penalty, a reputation nightmare, or an operational bottleneck. That is the business environment in Europe and, in this case, Germany. We provide a solution for you to validate the authenticity of your digital assets and obtain a reliable proof of their integrity. This validation through verification will include human error and malicious tampering – all changes will be identified.
We understand that keeping up with regulatory pressure while maintaining operations and turning a healthy profit are considered basic needs of enterprises, especially those who aim to grow. In that sense, understanding and aligning with the German Commercial Code (Handelsgesetzbuch, HGB) and the Financial Market Integrity Strengthening Act (Finanzmarktintegritätsstärkungsgesetz, FISG) is a key component for those inserted in the German market.
The German Commercial Code (HGB) and the Financial Market Integrity Strengthening Act (FISG)
The HGB and FISG serve as guidelines for how commercial transactions, financial statements, corporate governance, and other aspects of business must be handled.
The German Commercial Code, which focuses on accounting standards when industries report their financial statements, has three main sections that deal with records' integrity and how it should be upheld in reporting.
Section 239 reinforces that the digital records need to "(…) be made readable at any time within a reasonable period (…)" and "(…) must be complete, correct and timely (…)" – indicating both availability and integrity. This section also goes into detail about how "An entry or a documented record may not be modified (…)". Section 317 doubles the necessity for accuracy by stating that the "(…) report accurately presents, as a whole, the position of the group (…)".
For your business to become a reliable market participant, you must implement an internal governance mechanism that ensures more than basic compliance. You want a system that continuously keeps your documentation accessible and verifiable. That is the way to align with their corporate disclosure while maintaining operational efficiency.
On the other hand, regarding the Financial Market Integrity Strengthening Act, we come across a similar view of corporate attitude and action: financial reports and their veracity. The Act itself is already a reform of previous financial reporting acts.
KPMG defines three key points in the Act that companies should look out for:
Section 91 III AktG went into the need for "(…) adequate and effective internal control systems (ICS) and risk management systems (RMS) (…)" within the business's structure. All to detect and prevent financial misstatements, fraud, and corporate risks.
Section 107(4) pressured for the need to "(…) establish an audit committee (…)", which reinforces the need to increase attention to the integrity of financial documentation.
331a remarks that providing an incorrect "balance sheet oath" (Bilanz-Eid) is a distinct and separate criminal offense that applies to executives, such as board members, managing directors, and auditors, who provide false assurances regarding the accuracy of financial statements or reports.
These three points make the intentions of the Federal Financial Supervisory Authority (BaFin) precise: stronger controls, enhanced oversight/supervision, and stricter criminal liability. Organisations in the financial sector need to understand that this is based on a precedent (WireCard Scandal) and aims to strengthen their position in international and European markets. It goes beyond just checking a list of requirements.
Compliance and Integrity in Financial Documents
Amid these commercial regulations (HGB) and industry reinforcements (FISG), we present to you Truth Enforcer. The solution that leverages technology (blockchain) to verify your digital assets and identify any tampering without fail.
Establish an ecosystem where you can proceed with your business operations while coexisting with regulatory frameworks and integrity verifications – identifying any tampering is a Priority.
- Ensure legal compliance and enhance verifiability: Meet HGB and FISG integrity verification requirements by maintaining verifiable records and immutable audit trails.
- Improve audit efficiency and preparedness for regulatory audits: Any internal or external audit is performed without bottlenecks or delays.
- Strengthen supervision oversight: BaFin and other regulatory bodies can check your authenticity status without accessing your data, and you can do the same internally across different levels of your hierarchy. You will have an internal control that reduces the risk of financial misstatements.
- Support trust and transparency: Any commercial transactions will have an emphasis on transparency and preserve the integrity within the ecosystem created for internal and external verifications – this will increase the trust across all stakeholders.
These factors can become your pillars to achieve the compliance and integrity you need in your financial documents. It is where you can build a trustworthy system without exposing your data while committing to transparency and accountability.
Efficient Document Integrity and Secure Verification
We want to help you visualize this in a real scenario. Let us say you have a mid-sized financial advisory firm operating in Germany facing regulators' scrutiny due to the Financial Market Integrity Strengthening Act (FISG). In this case, they need to ensure that all financial reports, audit trails, and internal risk assessments are accounted for and have not changed.
It is important to note that this firm experienced several issues with external auditors flagging inconsistencies, altered documents, and stakeholders requested to ensure authenticity.
They have now integrated Truth Enforcer into their system, specifically opting for the Truth Enforcer for SharePoint - a pre-built and ready-to-use solution - since all their files are stored within their Microsoft 365 environment, namely Microsoft SharePoint.
The result? Both internal and external auditors can check all the files without having access to the content itself (accessibility will depend on settings). The verification can happen anytime, and tampering is easily flagged without lengthy investigations.
The firm can now enjoy an audit efficiency boost surpassing 50% because it has eliminated several manual steps, has an easy authenticity detection for any undetected modifications or fraudulent changes, and has regulatory confidence with the transparency to back it up.
Guaranteeing integrity in financial reporting means that every file is accurate and free from manipulation. This setup is your internal control to mitigate fraud, misrepresentation, and financial misconduct. You can obtain a reliable and sustainable reputation on it that goes beyond avoiding legal repercussions.
One of the significant benefits of implementing Truth Enforcer is that it will free up your time and resources to focus on growing your business. If you make the initial effort to correct the financial report, the rest comes without worrying about unidentified tampering.
Truth Enforcer makes integrity verifiable and innovation accessible. Contact us - we look forward to connecting with you.
By Francisco Rodrigues, Product Manager
"I write about how software integrations can adapt to business environments and respond to industry-specific demands. I want to show enterprises the road to streamline processes, eliminate bottlenecks, and ensure compliance by empowering teams and C-suite executives with the right tools."