EY fined over audits of failed German payments firm Wirecard
The German arm of EY has been fined 500,000 euros after acting as the auditor for collapsed payments company Wirecard and barred from auditing certain kinds of companies for two years
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Your support makes all the difference.The German arm of EY, one of the world's Big Four accounting firms, has been fined 500,000 euros ($544,630) after acting as the auditor for collapsed payments company Wirecard and barred from auditing certain kinds of companies for two years.
Germany's APAS accounting oversight body said it imposed the fine for breach of professional duty in auditing Wirecard from 2016 to 2018. It said the decision can be appealed in court, and while it bars the auditor from taking on new companies “of public interest,” it does not prevent it from servicing existing clients.
Wirecard filed for bankruptcy protection in 2020 after 1.9 billion euros ($2.1 billion) in cash balances on the company's books could not be verified.
Its former CEO, Markus Braun, is on trial on charges of defrauding creditors. He has denied the charges, maintaining he acted in good faith and was not aware of the machinations of others.
The fraud cost banks 3.1 billion euros in loans and writedowns, prosecutors say. The case exposed flaws in German financial oversight and embarrassed then-Chancellor Angela Merkel, who had lobbied for the company during a visit to China.
Wirecard's accountant and the head of a subsidiary based in Dubai, United Arab Emirates, are also on trial in Munich.
EY, previously known as Ernst & Young, said it has not been provided details of the APAS investigation, “which will be carefully examined when they are finalized and formally communicated.”
In a statement, the company said it had cooperated with the investigation and that “we regret that the collusive fraud at Wirecard was not discovered, and we have learned important lessons from this matter.”