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    So when the findings of KPMG’s six-month special audit were published last week, the 74-page report provided for the first time a description of the inner workings of a company that has long been inscrutable. Whether aspects of the structure described were real or fraudulent remains unproven — KPMG did not come to a conclusion, citing “obstacles” compounded by a lack of data — and that lack of clarity has knocked a third, close to €5bn, off the market valuation of a group that had been worth more than Deutsche Bank.

    FT: How the paper trail went cold in KPMG’s special audit of Wirecard

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      Updated report here: https://www.mca-mathematik.com/ey-wirecard-finance/

      The KPMG report and other information suggest that EY may have been repeatedly deceived by Wirecard when preparing past audit opinions. Internal chats among Wirecard finance employees seem to imply that EY Munich influenced another EY office as a favour for senior management in Munich. This situation is detrimental for all stakeholders in Wirecard.

      Given KPMG’s findings, and with this knowledge, can EY still stand by its previous audit opinions and Wirecard’s accounting treatment? We believe it is essential EY reviews its prior audits and takes account of the KPMG report and the other information now available to ensure a sufficiently rigorous process when handling the current audit.

      Throughout the KPMG report, it’s clear that KPMG’s forensic opinion often differs from that of EY, Wirecard’s group auditor. Most notably, as we highlighted in our last article, EY’s acceptance of Edo Kurniawan’s accounting opinion for treating escrow accounts as cash, written and sent just days before the 2016 audit was signed, raises concerns about the amount of time EY had to perform robust and independent analysis of this and other key accounting issues.

      As a second example, how were EY happy to allow Wirecard to report TPA revenue on a gross basis when Wirecard had no access to merchant records or KYC? It is risible that hundreds of millions of euros of revenue were booked and “audited” based solely on the presentation of quarterly excel spreadsheets from TPA partners.

      To be fair, EY’s lack of insight into the situation does not look like their fault. Communications within the Wirecard finance team in 2016 and 2017 make for astonishing reading. It’s clear that there’s little respect for EY. Executives in the finance team gloat while making derogatory comments related to how they can get EY to do whatever they want. Was EY aware of how they were viewed, or more likely, were they simply lied to?

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        EY refusing to sign off on Q4 2019 results; Q1 2020 results tomorrow. Wow. Just wow. This should be interesting to listen in on.

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          Hm, nothing much happened.