Germany’s audit supervision regulator (APAS) has raised the status of the investigation into the consulting firm Ernst & Young (EY). Since 2015, the company has signed off on every report of the bankrupt card issuer Wirecard AG.
According to Handelsblatt, the investigation into EY, begun in October 2019 after a Financial Times article about the fraud, has progressed to a full investigation in line with all regulatory requirements.
“There is currently a formal review of EY’s professional conduct, including compliance with legal and professional requirements,” as stated in documents obtained by the publication.
If any violations are found, the company faces fines and disciplinary sanctions, as well as the revocation of its license.
The management of the auditing firm is cooperating with German financial authorities.
“We also want the matter to be examined comprehensively, fully and quickly,” EY said.
In June, a hole of almost €2 billion was found on Wirecard’s balance sheet. The company subsequently began insolvency proceedings.
The incident drew the attention of German prosecutors, after which police arrested former Wirecard CEO Markus Braun.
Former top Wirecard executive Jan Marsalek, after his disappearance, made a large transfer in bitcoins. According to media reports, he may be hiding in Russia.
In late July, Wirecard investors filed a lawsuit against BaFin, the German Federal Financial Supervisory Authority. They accused the regulator of taking too long to act against the company.
In June, the SdK, the German shareholders’ association, filed a lawsuit against EY.
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