%20(3).png){kind=small}
![TFD [LOGO] (10).png](https://static.wixstatic.com/media/bea252_c1775b2fb69c4411abe5f0d27e15b130~mv2.png/v1/crop/x_150,y_143,w_1221,h_1193/fill/w_179,h_176,al_c,q_85,usm_0.66_1.00_0.01,enc_avif,quality_auto/TFD%20%5BLOGO%5D%20(10).png)
ERNST&YOUNG ADMITS FALLING FOR ‘CRIMINAL GROUP’ AT WIRECARD
- By The Financial District
- Mar 20, 2021
- 2 min read
An Ernst & Young LLP (EY) partner said his firm fell victim to ‘criminals’ at Wirecard AG, rejecting allegations EY didn’t do enough to uncover wrongdoing at the now-defunct payment processor, Karin Matussek reported for Bloomberg News.
The firm’s auditors reacted swiftly in February 2019 after the Financial Times’ report of accounting irregularities emerged, Christian Orth, EY Germany’s professional practice director, told a German parliamentary committee on Friday.
EY’s review at the time found the wrongdoing was limited to individuals in Singapore and failed to uncover evidence that Wirecard’s top managers in Germany were involved, he said.
“There was a group of criminals that managed to deceive everyone – including us at EY,” said Orth. “This has damaged EY but also the profession as a whole.”
EY, Wirecard’s auditor until the former stock-market darling’s collapse last year, has come under fire for a failure to spot 1.9 billion euros ($2.3 billion) missing from the payment company’s accounts.
Former CEO Markus Braun denied accusations of wrongdoing until the company in June was forced to admit in June that the missing cash likely never existed. The company collapsed that month when EY finally refused to sign off on their books.
EY added more staff and devoted more hours to review Wirecard’s 2018 accounts, but there was no basis to not clear them at the time, Orth said on Friday. When signing off on their financials, EY did add some language referring to the Singapore case, Orth said.
Such an addition to the audit opinion was very unusual, the executive said, adding that it amounted to a message to the broader public signaling EY’s concern. The review of the 2019 accounts had already been affected by a Financial Times article from October of that year, Orth said.
The “turning point” came in early 2020, when EY learned that Wirecard had moved trust accounts from Singapore to the Philippines, he said. “That’s when the fire alarm went off for me,” said Orth.
