EY is prohibited from accepting new “audit assignments from companies in the public interest for two years” and receives a “fine of 500,000 euros”, according to a press release published Monday by Apas, the gendarme of the profession of auditors in Germany.
“EY Germany has fully cooperated with Apas throughout the investigation” and “regrets that the fraud at Wirecard was not discovered sooner,” the group responded in a statement.
A young, fast-growing paperless payments company, Wirecard found itself the epicenter of a gigantic fraud in 2020 when its executives admitted that 1.9 billion euros registered in the accounts did not exist – a gaping hole that EY did not pick up.
The ex-CEO of Wirecard, Markus Braun, has been appearing in criminal justice in Munich since December, while his right-hand man, Jan Marsalek, presumed to be another major organizer of the fraud, remains on the run.
The detailed investigation into the services of the audit firm at the former fintech for the years between 2016 and 2019 brought to light “proven breaches of professional obligations” justifying sanctions, according to Apas.
Five auditors, employees of EY at the time, were fined between 23,000 and 300,000 euros and seven others ultimately escaped sanctions by having surrendered their license as auditors.
“EY Germany is a different company today” with “a new management team and new supervisory structures”, according to the firm.
The British auditing giant has 12,000 people in Germany within a global network of 350,000 people.
Defrauded shareholders of Wirecard are trying to obtain from justice the launch of a class action procedure against EY, comparable to a “class action” in the United States, without success for the moment.
Apas sanctions do not apply to existing mandates.
Dropped since the Wirecard scandal by several large clients – Commerzbank, Deutsche Telekom among others – EY has remained the auditor of the first German bank Deutsche Bank, which even intends to extend its mandate for a year at the shareholders’ meeting in May .