IDW PS 980

Auditing standard of the IDW (Institue of Public Auditors in Germany)

The PS 980 auditing standard forms the basis for auditing compliance management systems (CMS). IDW PS 980 supports compliance with legal and regulatory requirements for companies in Germany. PS 980 provides a framework for the content and structural requirements of a Compliance Management System and offers companies a guideline for developing and implementing a CMS.

A CMS comprises measures taken by management to ensure compliance with applicable regulations. These rules can include both internal processes, such as certain procedural instructions, and external regulations, such as laws.


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Basic components of a CMS:

  • Compliance culture

  • Compliance goals

  • Compliance risks

  • Compliance program

  • Compliance organization

  • Compliance communications

  • Compliance monitoring/improvement

An effectively designed CMS supports measures to reduce the risk of financial, reputational and liability damage due to violations of legal regulations or compliance requirements. Furthermore it takes into account the increasing regulatory requirements of the legislator and the expectations of stakeholders.

In principle, a distinction can be made between three types of test:

  • Typ 1: Design and documentation of the CMS.

  • Typ 2: Adequacy and implementation of the CMS.

  • Typ 3: Efficiency and effectiveness of the CMS.

Advantages through certification according to PS 980:

  • Assessment of the design, adequacy and effectiveness of the CMS by an independent third party

  • Confirmation of fulfilment of organisational and due diligence obligations

  • Proof of risk-oriented processes in the company

  • Evaluation of weaknesses of the CMS