In common with many other mainland European states, accounting in Germany is an integral part of the legal framework, governed by detailed rules set by the state. The key users of accounting information in Germany have traditionally been the providers of finance, such as the banks, who obtain information on the financial standing of corporations by having representatives on boards of directors. The importance of loan finance in Germany is reflected in the high average gearing ratios. But this system is slowly giving way to enhanced corporate disclosure driven by the need to seek new sources of capital and entice international investors.

In 1994, for the first time, three German public companies published their accounts in accordance with the IAS (and with the German commercial code). Following moves by other German companies to bring their accounts in line with the IAS, including the much-publised Daimler-Benz's adoption of US GAAP, and the US listing of Deutsche Telekom, the government signaled that it might be prepared to allow German companies, seeking foreign capital, to use IAS or US GAAP for group accounts, rather than continued enforcement of the requiremen

Compared to the Anglo-Saxon world, the German accountancy profession was a late developer. A major contributing factor was the late emergence of sovereignty in 1871, following Bismarck's unification of Germany and the formation of a federal state. Even after this unification, German accountancy regulations and prerogatives were influenced by individual Länder (provinces) legislation - with the exception of the years 1933 to 1945 - resulting in a diverse regulatory environment which lasted into the early 1960s.

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