B2B Payments

Wirecard Expands KMPG Audit To Clear Fraud Allegations

Wirecard

Wirecard is having auditing giant KPMG expand the scope of its review of Wirecard financials as the company continues to defend against allegations of fraud.

Reports in Reuters on Wednesday (Nov. 6) said Wirecard is having KPMG expand its audit review and expects authorities in Singapore to clear the company of any claims of fraud. Wirecard hired KPMG in response to previous allegations laid out in a Financial Times article last month, which accused the Germany-based firm of accounting fraud.

Specifically, the FT claimed that documents the publication obtained “appear to indicate a concerted effort to fraudulently inflate sales and profits at Wirecard businesses in Dubai and Ireland, as well as to potentially mislead EY, Wirecard’s Tier 1 auditor.”

Soon after, Germany’s Financial Supervisory Authority (BaFin) opened an investigation into the allegations, as did Singapore police.

“We can totally confirm today that all of these allegations are unfounded,” said Wirecard Chief Executive Markus Braun in a statement Wednesday, according to Reuters. “But still, to give an additional service to the market and to bring down all these allegations, we decided to include here a second review by KPMG … We are very optimistic that in the next month, a couple of months, this can be resolved.”

Braun spoke to analysts on a conference call, noting the firm saw a 43 percent profit increase quarter-over-quarter. He added that the expansion of KPMG’s audit will include a look into separate allegations Wirecard overstated merchant cash advances, as well as financials related to third party acquiring accounting, according to reports.

The report said KPMG is slated to complete its audit in the first quarter of next year.

Wirecard has also filed a lawsuit against the Financial Times in relation to its allegations, which first began earlier this year in a January report that also accused Wirecard of accounting fraud in its Singapore operations. The publication’s claims caused Wirecard shares to decline by as much as $10 billion, reports said.

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