The Audit Failures of the Wirecard Scandal

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.