Accounting Firms

EY failed to check Wirecard’s Singaporean accounts for three years, reports claim

‘Big Four’ accountancy firm EY failed to request account information from a Singaporean bank reportedly used by German lender Wirecard for almost three years, a report from the Financial Times has claimed.

According to the FT, Wirecard claimed it had almost £1bn in cash contained within Singapore’s OCBC Bank, which the accountancy firm failed to request information from. The FT’s report also claims that, instead, EY relied on filings from Wirecard and screenshots from a third-party trustee.

It comes after Wirecard collapsed into insolvency last week (25 June), following an ongoing scandal into missing funds from its accounts.

It was earlier revealed that €1.9bn (£1.7bn) had gone missing from its books, with the group blaming “possibly fraudulent” transactions for the lost funds.

The Munich-based group was forced to postpone the publication of its financial results for the fourth time this year, after EY refused to sign off its accounts in light of the missing funds.

According to Wirecard, EY informed the group that “no sufficient audit evidence” could be obtained of the missing £1.7bn figure which accounts for approximately a quarter of its consolidated balance sheet total.

The payments firm said it was likely that the missing funds did not exist, however.

In a statement, the group said: “The management board of Wirecard assesses on the basis of further examination that there is a prevailing likelihood that the bank trust account balances in the amount of €1.9bn do not exist.

“The company previously assumed that these trust accounts have been established for the benefit of the company in connection with the so called Third Party Acquiring business and has reported them as an asset in its financial accounts. The foregoing also causes the company to question the previous assumptions regarding the reliability of the trustee relationships.”

Following the scandal, former CEO Markus Braun was arrested by German authorities last Tuesday (23 June) on charges of inflating the company’s balance sheet. He has been released on €5m (£4.4m) bail.

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