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EY faces two-year ban and fine in Germany over Wirecard audit failure

EY faces two-year ban and fine in Germany over Wirecard audit failure

The German regulator APAS has imposed a two-year prohibition on EY from auditing companies of public interest and a 500,000 euro ($541,650.00) penalty, according to a report by Handelsblatt on Monday.

The regulator did not comment on the report and is expected to issue a statement later on Monday about its decision to sanction EY.

EY could not be reached for comment.

EY failed to detect a 1.9 billion euro hole in the accounts of Wirecard, a fintech company that collapsed in June 2020 owing almost $4 billion to creditors. EY said Wirecard was involved in a complex global fraud.

Wirecard started as a payment processor for gambling and pornography websites in 1999 and became a fintech star and a member of Germany’s DAX index.

Handelsblatt said sources familiar with the matter told them that APAS found serious breaches of duty by EY in relation to the scandal.

The reported ban prevents EY from bidding for audits of certain companies for two years. This includes all listed companies and most of the financial sector, such as banks and insurers, Handelsblatt said.

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