EY chairman: we should have caught Wirecard sooner

The global chairman of accounting giant EY has told clients the audit firm regretted not detecting fraud sooner than it did at German payments company Wirecard.

“Many people believe that the fraud at Wirecard should have been detected earlier and we fully understand that,” said EY’s global chairman and chief executive Carmine Di Sibio in a letter to clients.

“Even though we were successful in uncovering the fraud, we regret that it was not uncovered sooner.”

EY said it would improve how it verifies information from clients through greater use of technology.

German regulators are probing EY’s role as Wirecard’s auditor after the payments firm collapsed amid a €1.9 billion hole in its accounts.

“The collusive acts of fraud at Wirecard were implemented through a highly complex criminal network designed to deceive everyone – investors, banks, supervisory authorities, investigating lawyers and forensic auditors, as well as ourselves,” Di Sibio said.

“The public interest clearly requires that much more be done to detect fraud at its earliest stages.”

London’s Financial Times newspaper was first to report the EY letter to clients. EY confirmed the report.

Di Sibio added: “I am not going to pre-empt the outcome of any investigations, but I want to clarify a fact that I know is of considerable importance to you and all our clients . . . 

“When external confirmations for trustee accounts were obtained, the evidence received (including bank confirmations) had been falsified.

“It is obvious, therefore, that we need innovative techniques and processes to tackle future fraud of this scale.”