Tuesday 4 August 2020 2:59 pm

German watchdog audits collapsed Wirecard’s financial accounts

Germany’s financial watchdog today announced it will conduct an audit of accounts covering the past few years of collapsed payments fintech Wirecard.

BaFin said it was carrying out the audit after Wirecard refused to accept it had produced an error, despite it folding last month after details of a €1.9bn accounting black hole came to light.

Read more: Former Wirecard boss Markus Braun arrested for second time

The head of BaFin has previously described the Wirecard scandal as a “massive criminal act”. 

“It is plain vanilla, old-fashioned criminal behaviour,” BaFin president Felix Hufeld said in an online panel discussion last month.

It comes after the German auditing regulator yesterday announced it is examining Big Four accounting firm EY over its involvement with the disgraced fintech. 

A document from the Economic Ministry, seen by German newspaper Handelsblatt, stated that German regulator Apas is examining EY’s audits of Wirecard from 2015.

Wirecard, once hailed as Germany’s tech prodigy, collapsed in June after EY discovered that €1.9bn of cash meant to be on Wirecard’s balance sheet was “missing”.

The fintech, which premiered on Germany’s main Dax index with a €24bn (£21.8bn) valuation just two years ago, filed for insolvency in late June.

The German government last month vowed to overhaul its accounting industry as part of measures to cushion the blow from the disgraced payments firm.

Read more: German regulator examines EY over Wirecard audits

Jorg Kukies, Germany’s deputy finance minister said the Wirecard affair showed “self-regulation by the auditors doesn’t work properly”.

Chancellor Angela Merkel said the Wirecard case was “alarming”, while finance minister Olaf Scholz described it as “a scandal which is most unprecedented in the world of finance”.

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