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Wirecard Scandal: German Regulator Sanctions …

Wirecard Scandal: German Regulator Sanctions …

Under the supervision of the auditor, EY has to pay a fine of €500,000 and is not allowed to perform any audits for two years. When examining Wirecard accounts in 2016 and 2018, there were breaches of professional duty.

The auditors’ oversight authority APAS sanctioned audit firm Ernst & Young (EY) and individual auditors in connection with the Wirecard scandal. When examining the former payment service provider’s financial statements for the years 2016 to 2018, they see breaches of professional duty as proven, APAS announced Monday.

EY confirmed on Monday that it had been informed of the completion of the APAS exam, but the details of the decision are not yet known. EY will check these carefully.

Imposing a fine and a two-year ban

According to APAS, the audit firm must pay a fine of 500,000 euros. In addition, it was not allowed to conduct any statutory audits of public interest companies for two years. APAS announced that these were the so-called new states. Existing states are excluded. According to APAS, five auditors were also fined between €23,000 and €300,000. A spokesman for the Federal Office for Economics and Export Control, which is affiliated with APAS, did not provide any information on the total fines.

In the next step, she said, notifications from APAS will be prepared, and those affected can then file an objection against them. It is the most comprehensive procedure APAS has implemented to date. The supervisor finds that the testing company and many of its employees have been shown to have breached their professional duties.

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Certified forged financial statements

A company spokesperson said EY cooperated fully with APAS throughout the investigation. One regrets that Wirecard fraud was not detected earlier. The firm has learned important lessons from the case and has taken comprehensive measures to enhance audit quality and risk management.

Wirecard collapsed in the summer of 2020 after the board of directors conceded that €1.9 billion had not been found held in escrow accounts. Former Wirecard boss Markus Braun is currently on trial in Munich. EY has tested the alleged budgets of the former Dax group for years.