Friday November 12th 2021
Wirecard secret paper revealed
EY missed a number of warning signs
Actually, the investigation committee was supposed to shed light on the Wirecard case. But of all things, the report by auditor Wambach on the work of EY has so far been withheld from the public. Now the 168 pages can be viewed.
The “Handelsblatt” published the text of the special report on the work of the EY auditing company at Wirecard, classified as secret. The team around Martin Wambach takes EY hard in this. According to the report, which deals with the biggest economic scandal in the history of the Federal Republic of Germany, the auditors who have checked Wirecard’s balance sheets since 2009 have overlooked numerous warning signals.
Accordingly, the analysis of the special investigators also suggests: If EY had consistently audited according to the standards of the Institute of Auditors (IDW), business conduct might have been uncovered much earlier. The auditors found “significant deficits in accounting” as early as 2015, which were to be assessed as “fraud indicators” and “could have been recognized as such by an auditor”.
In the 168-page “Wambach Report” According to the “Handelsblatt”, sentences such as: “EY did not discern any discussion or plausibility check of these abnormalities.” In the EY documents, neither “the necessary critical attitude” nor the “higher risk assessment of an auditor” resulting from the special situation was discernible.
Specifically, the secret dossier mentions, for example, that EY relied on the particularly critical takeover of the Indian Hermes Group “essentially on oral and written statements from the possibly suspected persons” and on an important purchase agreement with the Al-Alam Group from Dubai apparently failed to notice that the contract contained the name of another company six times instead of Al Alam.
EY does not want to know about any of this and rejects the allegation of misconduct. “According to the IDW audit standards, a retrospective assessment does not allow any conclusions to be drawn about the misconduct of the auditor,” says a spokesman for the “Handelsblatt”. In addition, the investigators were only able to look at individual aspects of EY’s audit activities during their work. The EY auditors had worked “to the best of their knowledge and belief”.
The Munich public prosecutor’s office is currently investigating two EY examiners on suspicion of aid, despite all attempts at relativization. In addition, the regulatory authority Apas has launched an investigation that the employees could lose their license. At the moment, however, it is not yet clear whether and, if so, to what extent EY could be liable for the gigantic damage incurred. Because Wirecard shares, which had reached record levels of almost 200 euros, are now only worth a few cents and are a pawn for speculators.