Two Ernst & Young auditors were told by a German court that they must testify before a parliamentary committee about their accounting work for scandal-ridden Wirecard AG.
The ruling gives EY clarity about how much information it may disclose under professional rules, the accounting firm said in a statement Thursday. While ruling the pair had to testify, the Federal Court of Justice lifted fines imposed on the men, saying the law had been unclear.
EY audited Wirecard’s books until its collapse last year and has come under fire for a failure to spot that 1.9 billion euros ($2.3 billion) were missing from the payment company’s accounts.
Current and former EY partners infuriated the committee in November when they declined to fully answer questions about Wirecard, citing professional confidentiality rules. The lawmakers fined the EY accountants and another auditor from Baker Tilly.
“We have always stressed that we’re contributing to clear up the Wirecard case, but that we need a legally valid lifting of confidentiality rules,” EY said in a statement Thursday.
The judges said in their ruling dated Jan. 27 that after Wirecard’s insolvency administrators waived the confidentiality requirements, it wasn’t necessary to get additional clearance from the company’s former board members. But since lower courts had issued diverging opinions, the men shouldn’t be liable for the fines.
The firm in December handed over files to parliament that were sealed pending the top court ruling. EY said Thursday that it has already contacted the lawmakers to allow them to read the documents.
The committee had declined to fine two other EY auditors because they are being investigated. Those two, including Deutsche Bank’s top accountant Andreas Loetscher, have the right to remain silent because they are targets of the probes. Loetscher decided to step aside while his probe is pending.
The top court cases are: BGH, StB 43/20, StB 44/20.
Top Photo: A member of the inquiry committee holds a document folder as a parliamentary probe into the collapse of Wirecard AG begins, at the Reichstag building in Berlin, Germany, on Thursday, Oct. 8, 2020. German lawmakers sought to lay some of the blame on Finance Minister Olaf Scholz for the failure to detect wrongdoing at Wirecard, as a parliamentary inquiry into the collapse of the digital-payments company gets underway in Berlin. Photographer: Krisztian Bocsi/Bloomberg
Topics Germany
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