Corruption - Wirecard scandal: EY's appeal largely rejected
According to a ruling, the Wirecard insolvency administrator may request information about documents and access to files from the auditor EY, provided they relate to annual and consolidated financial statements from 2014 to 2019. With this decision, the Stuttgart Higher Regional Court largely rejected an appeal by Ernst & Young (EY) in the wake of the scandal, as it announced on Tuesday. EY had conceded defeat before the Regional Court of Stuttgart a year ago and subsequently appealed the ruling.
The Higher Regional Court Senate has now allowed an appeal to the Federal Court of Justice, according to the press release. The extent to which auditors are obliged to provide information to their clients and whether they can be required not to destroy files once the statutory retention period has expired has not yet been clarified by the highest court. An EY spokesperson initially declined to comment.
Wirecard collapsed in the summer of 2020 after the Management Board admitted that 1.9 billion euros allegedly held in escrow accounts could not be found. EY had audited the allegedly falsified balance sheets of the former DAX company for years.
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- The Wirecard insolvency administrator will now have the right to inspect documents and access files related to the company's annual and consolidated financial statements from 2014 to 2019, as per the ruling from the Stuttgart Regional Court.
- Despite EY's appeal, the Stuttgart Regional Court's decision, which was partially in favor of the insolvency administrator, has largely stood, according to a recent announcement.
- The Stuttgart Regional Court of Appeals has granted EY an appeal to the Federal Court of Justice, due to the unresolved questions about auditor's responsibilities and file destruction, as revealed in their press release.
- The Wirecard scandal, which involved alleged falsified financial statements, led to the company's collapse in the summer of 2020 and EY's audit of those financial statements for several years beforehand.
- As a result of the Wirecard scandal, the German judicial system is examining the role of auditors and finance services in ensuring financial transparency, which is of significant concern in Germany and beyond.
Source: www.stern.de
