Wirecard's insolvency manager has filed a lawsuit against the accounting firm EY, seeking 1.5 billion euros in damages for its alleged negligence in auditing the company's finances before its collapse in 2020. This legal action adds to a series of lawsuits EY is facing, including a recent investor suit demanding over 700 million euros. EY has not commented on the new lawsuit but has previously denied claims for damages related to Wirecard, which went bankrupt after revealing a 1.9 billion-euro discrepancy in its accounts attributed to fraud.
EY has been banned from auditing companies of public interest in Germany for two years and fined €500,000 ($544,000) over its failures as the auditor of Wirecard in the years before the digital payments company’s collapse. Germany’s auditor supervisory authority APAS imposed sanctions on the auditor of Wirecard over “breaches of professional duty” between 2016 and 2018. Wirecard filed for insolvency in 2020 following the discovery of a $2 billion accounting fraud that regulators, the company’s supervisory board and its longtime auditor failed to spot.
Germany's accounting watchdog has fined and banned EY, the 2016-2018 auditor of Wirecard, from taking on new audits for companies of public interest for two years and imposed a €500,000 fine. Wirecard filed for insolvency in June 2020, owing creditors almost $4 billion, after disclosing a €1.9 billion hole in its accounts that EY said was the result of a sophisticated global fraud. The ban forbids the auditor from participating in tenders for audits of certain companies for two years, including all listed companies and the majority of the financial sector consisting of banks and insurance companies.
EY, one of the world's largest accounting firms, has been banned by Germany's audit watchdog from conducting audits for public companies for three months over its work for Wirecard, the German payments company that collapsed in an accounting scandal last year. The watchdog accused EY of failing to uncover the fraud that led to Wirecard's insolvency.
