The Audit Failures of the Wirecard Scandal
Technical accounting post-mortem.
Summary
The reference has not verified this book in detail; the summary states only what the title, author and subject establish.
Low and Heyd wrote an academic treatment of the audit failures in the Wirecard collapse. The reference has not verified the book's contents.
What the title, authors and date establish is the subject: an examination of how the statutory audit of Wirecard failed to detect or report the fraud over a period of years, in a case where nearly two billion euros of supposed trust account balances did not exist. The authors approach this from an accounting and auditing perspective rather than as journalism.
The established facts of the case that any such treatment addresses include the auditor's reliance on confirmations relating to third-party acquiring partners and escrow accounts that were not obtained directly from the banks concerned; the acceptance of documentation supplied through intermediaries rather than independently; the failure to apply professional scepticism to reported margins in the claimed geographies that were implausible on their face; the German audit oversight regime and its response; the subsequent regulatory changes including mandatory auditor rotation and the reform of BaFin's supervisory powers; and the liability proceedings brought against the audit firm.
Readers wanting the investigative account of the fraud itself should read Dan McCrum's Money Men, also in this reference. This volume appears to address the professional and regulatory questions rather than the narrative, and readers should verify the specific coverage against the table of contents.
Key takeaways 6
- The Wirecard audit accepted confirmations of cash balances that were not obtained directly from the banks holding the accounts.
- Reported margins from the claimed third-party acquiring geographies were implausible on their face and were not challenged.
- Statutory audit as practised did not detect a fraud that had been publicly alleged with documentary support for years.
- German audit oversight and financial supervision both failed, which prompted subsequent reform of BaFin's powers.
- Mandatory auditor rotation and other reforms followed the case, which indicates the regulator located the failure in audit independence.
- Liability proceedings against the audit firm test whether professional standards were met, which is a separate question from whether the fraud was detectable.
Who should read it
Auditors, audit committee members and regulators who need the professional analysis of the Wirecard audit failure, verified against the book's actual coverage.
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Where it sits in the reference 3
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