German regulator suspects EY knowingly issued ‘factually inaccurate’ Wirecard audit
Germany’s audit watchdog Apas suspects EY partners knew they were issuing a “factually inaccurate” audit for Wirecard in 2017.
Apas has reported EY to prosecutors after believing the big four firm may have acted criminally during its work for payments company Wirecard, which collapsed into insolvency earlier this year.
According to the FT, EY audited Wirecard for more than a decade until 2019, and always gave unqualified audits. However in 2017 EY warned Wirecard a qualified audit was imminent, and shared a draft version of a qualified opinion with the payments firm.
Days later however, EY changed its mind. The FT reported today Apas found it difficult to believe any issues could have been resolved within a few day, and so told prosecutors that therefore EY’s unqualified audit was “factually inaccurate”.
Apas is currently probing EY’s work on Wirecard. Following a lengthy investigation by the FT, the collapse of the payments company and the allegations connected to its demise became one of the biggest fraud scandals in Europe.
Wirecard collapsed after it disclosed a €1.9bn black hole in its accounts earlier this year.
An EY spokesperson said: “We dispute these allegations which stem from a letter written by the German regulator Apas to the Berlin prosecutor and are not based any conclusion of any investigations.
“EY Germany conducted the Wirecard audit procedures professionally, to the best of their knowledge and in good faith. EY Germany is actively working towards a legally effective release from the confidentiality obligations, after which we will be able to provide details that we believe will clarify questions raised. EY Germany is cooperating with all official investigations.”