Criminalising Annual Accounts

The trustworthiness of financial statements is crucial for economic behaviour of all actors involved. Without the presumption of a true and fair display of a company’s financial situation trade is made more and more difficult – especially when liability is limited – as (potential) creditors and investors are more likely to enter and maintain a business relationship with a solvent company. Therefore, and to avoid additional charges for risk compensation, it is necessary for the company to present its performance in the best possible way – though, there is only a thin line between the use of allowed options in financial statements and deceit. This paper analyses the possible responses in case this border is crossed and false or misleading statements in bookkeeping and accounting are used.