EY fined, banned from some audits in Germany over Wirecard scandal

EY fined, banned from some audits in Germany over Wirecard scandal
© Reuters. FILE PHOTO: The logo of Ernst & Young is seen in Zurich, Switzerland November 13, 2020. REUTERS/Arnd Wiegmann

BERLIN (Reuters) – Germany’s accounting watchdog on Monday handed the 2016-2018 auditor of Wirecard, named in the company’s annual reports as EY, a 500,000 euro fine ($541,650.00) and banned it from taking on new audits for companies of public interest for two years.

EY said in an email that it had been informed by watchdog APAS that an investigation into the company had been completed, but that it had not been briefed on the details of the decision.

APAS said in a statement that it had imposed sanctions on Wirecard’s auditing company and five individual auditors, without referring to EY by name. Wirecard’s annual report names EY as the auditor for that period.

Wirecard filed for insolvency in June 2020, owing creditors almost $4 billion, after disclosing a 1.9 billion euro hole in its accounts that EY said was the result of a sophisticated global fraud.

The company, founded in 1999, began by processing payments for gambling and pornography websites before becoming a fintech star and a member of Germany’s blue chip .

APAS found breaches of duty by the auditor in connection with the scandal, it said.

The ban forbids the auditor from participating in tenders for audits of certain companies for two years. This includes all listed companies as well as the majority of the financial sector consisting of banks and insurance companies.

($1 = 0.9231 euros)

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