EY prepared ‘unqualified audit’ for Wirecard last month
![](https://www.cityam.com/wp-content/uploads/2020/07/1223828226.jpg?w=742)
EY reportedly prepared an unqualified audit opinion on Wirecard’s accounts in early June, just weeks before the company collapsed.
The auditing firm delivered a draft version of its official audit opinion, according to the Financial Times. Accountants usually share a draft to give clients the opportunity to look over the numbers and assessments.
The draft reportedly rejected allegations made by whistleblowers and concerns raised by KPMG in its special audit published at the end of April.
KPMG could not verify the existence of activities which Wirecard said accounted for half of its revenue and operating profit. By June the firm had collapsed after its third-party acquiring business was discovered to be fraudulent.
In documents reviewed by the FT, EY said “based on the findings of our audit, the attached annual financial statements comply in all material respects with German commercial law applicable to corporations and give a true and fair view of the net assets and financial position of the company.”
A week after the draft opinion, Wirecard collapsed into insolvency triggering a criminal investigation into the group’s former executives as well as a probe into the German financial regulator, BaFin. This week former boss Markus Braun was arrested for a second time as Munich prosecutors accused him of committing a multiyear fraud.
Wirecard’s third-party acquiring business, TPA, was exposed as a sham. In its draft opinion, EY said its “extended audit procedures” had found no evidence that the TPA business in Asia was “problematic.”
“Within the scope of the audit, we satisfied ourselves that the accusations [regarding third-party acquiring] of which we became aware were followed up and assessed by measures taken by the management board of Wirecard,” the accounting firm said.
EY added that “in the course of our extended audit procedures, no indications have arisen that would suggest any violations of the law” in relation to TPA.
EY Germany said: “EY Germany was not prepared to provide an unqualified audit opinion to Wirecard AG for its 2019 financial statements in early June 2020 and it had informed the company that its audit work was ongoing.”
“As the record shows, the release of Wirecard 2019 financials were delayed multiple times because EY Germany informed the Company that it had not been able to complete its audit work. It was ultimately the work of EY Germany that exposed the fraud related to Wirecard AG.”