Security & Fraud

Wirecard Delays Annual Report After Auditors Can’t Confirm $2.1B In Cash Exists

Wirecard Delays Annual Report After Auditors Can’t Confirm $2.1B In Cash Exists

Wirecard has postponed publication of its 2019 annual report after disclosing that its auditor can’t confirm the existence $2.1 billion in trust accounts — or about a quarter of the value on the company’s books.

The German electric-payments processor said in a statement Thursday (June 18) that auditor Ernst & Young told the firm that “no sufficient audit evidence could be obtained” to confirm that the money really exists.

“There are indications that spurious balance confirmations had been provided from the side of the trustee respectively of the trustee’s account holding banks to the auditor in order to deceive the auditor and create a wrong perception of the existence of such cash balances or the holding of the accounts for the benefit of Wirecard group companies,” the company said.

The Wall Street Journal reported that KPMG, which Wirecard hired last fall to conduct a special audit amid allegations of accounting problems, indicated a lack of cooperation from the company and third-party partners.

Wirecard said in its statement that it will announce another date for its 2019 report’s release in the future. However, the company noted that $2.24 billion of loans made to the company could be canceled if certified yearly and consolidated financial statements aren’t available by Friday.

The German company handles payments for merchants and delivers related offerings as well as loans. In March, Wirecard claimed that KPMG’s report didn’t uncover “any substantial findings” of problems.

However, the Journal on Thursday quoted an unnamed source as saying that German Financial regulator BaFin is investigating whether such remarks misled investors.

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