A new Financial Times report once again makes EY look completely incompetent as the auditors of the ill-fated German payments company Wirecard:
EY was warned in 2016 by one of its own employees that senior managers at Wirecard may have committed fraud and one had attempted to bribe an auditor.
The revelation that an EY employee identified suspicious activity at Wirecard four years before the payments group imploded in Germany’s largest postwar corporate fraud will increase the pressure on the accounting firm, which audited Wirecard for more than a decade and provided unqualified audits until 2018.
EY is already under investigation by Germany’s auditor oversight body Apas and is the target of lawsuits from Wirecard investors who lost billions of euros when the company collapsed in June.
Last month, EY’s global chairman Carmine Di Sibio wrote to clients to express “regret” that the fraud was “not uncovered sooner” but he claimed that EY was ultimately “successful in uncovering the fraud”.
However, a KPMG probe found that an internal whistleblower at EY had raised fraud allegations against Wirecard in 2016 and also reported that the company had attempted to bribe an auditor in India.
It’s really good reporting by FT, which has been all over the Wirecard accounting scandal from the beginning, so I urge you to read the whole article, if you haven’t already.
And it’s kind of funny to read about KPMG completely trashing EY’s anti-fraud team and auditors in an unpublished “info addendum” (reviewed by FT) to its report, which was released earlier this year after KPMG concluded its independent investigation into Wirecard’s accounting in late 2019.
Whistleblower warned EY of Wirecard fraud four years before collapse [Financial Times]