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The Wirecard case is catching up with EY again

The Wirecard case is catching up with EY again

DrHe returned to focus on audit firm EY after a controversial document from the now-defunct Parliamentary Inquiry into the Wirecard case became public. It concerns the previous confidential report of the commission’s special investigator, Martin Wambach, who, as an auditor, took a professional look at EY’s work in auditing Wirecard budgets. Members of the Bundestag had given EY auditors disastrous certification in their final report in June, based on Wambac’s findings.

Therefore, much of the content of the Wambach Report was known, but not the report itself. That has changed since Handelsblatt published the 168-page document online Thursday night. The business newspaper justified the move, among other things, by wanting to create transparency for Wirecard investors who have been hurt in one of Germany’s biggest economic scandals. The Wambach report was also paid for with tax money, so that the public had a right to its content.

Big doubts about reliability

The former Dax Group was forced to file for bankruptcy in June 2020 after the company admitted that 1.9 billion euros were missing from its balance sheet and EY refused to approve annual financial statements. However, in previous years, EY had always validated Wirecard’s budgets, despite many warning signs. In light of the scale of the scandal and the high level of effort involved in auditing, doubts arose about whether the auditors acted reliably.

EY has contradicted the allegations from the start and considers itself a victim of wirecard fraud. In a statement on Friday, the audit firm described the publication of the report as a disregard for the rule of law and a violation of personal rights. Therefore, one examines the criminal steps. Not only has the Wirecard scandal damaged EY’s good reputation, but auditors are often sued in court. At the company’s headquarters in Stuttgart, there are 320 lawsuits for investors with claims over 53 million euros. There are about 650 Wirecard lawsuits in Munich’s First Regional Court, but the plaintiffs have not been successful in 115 cases.

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According to Mark Tongler of the DSW Investor Protection Society, the Wambach report, which has become public, gives investors very valid arguments for taking action against EY now more than ever. DSW read from the document that EY did not comply with the testing guidelines. Investor advocates want to pool claims against EY at a Dutch foundation, and the project ultimately aims to settle. “The Wambach report confirms our earlier arguments,” said Martin Koehler of the law firm Telb. Affected investors are advised to seek their rights in court. Friendly solutions with EY are currently unrealistic.

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