Wirecard scandal - EY receives formal notification of sanctions
More than eight months after the decision, the auditing firm EY has been formally informed of the sanctions imposed in connection with the Wirecard scandal. The decision was received on Friday, as a spokesperson told Deutsche Presse-Agentur on request. It was initially unclear whether EY intends to appeal against the decision: the decision is currently being reviewed. A decision will then be made on how to proceed, it said.
The auditor supervisory authority Apas had already announced in April that it would sanction Ernst & Young (EY) and individual auditors. However, the formal decision has not been issued since then. EY had audited the allegedly falsified balance sheets of the former DAX company Wirecard for years.
During the audit of Wirecard's financial statements in the years 2016 to 2018, an Apas chamber considered breaches of professional duties to have been proven. According to previous Apas statements, EY must therefore pay a fine of 500,000 euros. The auditing firm is also prohibited from carrying out statutory audits of companies of public interest for two years. This concerns so-called new mandates - existing mandates are excluded. The proceedings are the largest that Apas has ever conducted, according to its own information.
In addition, five auditors were sanctioned with fines ranging from 23,000 euros to 300,000 euros. Apas did not disclose the total amount of the fines in April. It was not initially known whether the auditors had also received their notices. The Federal Office of Economics and Export Control, to which Apas belongs, could not be reached for comment on Friday afternoon.
The listed payment service provider Wirecard collapsed in the summer of 2020. The Management Board had previously been forced to admit that 1.9 billion euros in proceeds allegedly held in Southeast Asian escrow accounts could not be traced. Former Wirecard CEO Markus Braun and two co-defendants have been on trial in Munich since December 2022 on suspicion of fraud with billions in losses for the lending banks. Braun denies the allegations. He is in custody on remand.
On Thursday, the Munich public prosecutor's office also brought charges against a former Wirecard CFO. He is accused of having faked group turnover with others. The fictitious financial figures were intended to boost share prices and obtain bank loans.
Apas press release from April
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- The sanctions imposed on EY due to their involvement in the Wirecard scandal are a serious blow to their Finances in Germany.
- Despite the Sanction against EY for their role in the Wirecard case, it remains unclear if they will appeal the decision, as they are currently evaluating their options.
- Stuttgart-based auditing firm EY, who provided services to Wirecard, is one of the young German professionals being penalized for their part in the accounting irregularities within the company.
- The German Press Agency reported that the criminality associated with the Wirecard scandal continues to evolve, as more individuals, including a former Wirecard CFO, face charges for their role in the alleged fraud.
Source: www.stern.de
