Drift Magazine: Losing Count​ | The Sordid Business of Bookkeeping

A press review featuring Fabio De Masi

Oct 21st, 2020

Drift Magazine: Losing Count​ | The Sordid Business of Bookkeeping


"There is plenty of blame to go around for the stunning explosion of Wirecard. Until as recently as this year, the payments processing company was considered a German national treasure, the most exciting European technology firm since Nokia’s mid-2000s heyday. Valued in August 2018 at a peak of more than $28 billion, it looked like Wirecard and its executives were going to skate by on clout alone when a series of stories began appearing in the Financial Times in January 2019 suggesting that the company was falsifying the state of its financial accounts. (...)

Wirecard’s corporate auditors at Ernst & Young had apparently missed the fact that huge chunks of their client’s profits were pulled out of thin air. (...)

“I think they saw themselves more as providing a service to Wirecard rather than, you know, let’s say, providing a service to the public by actually really asking critical questions and checking whether everything is alright,” says Fabio de Masi, a German member of parliament from Die Linke who has emerged as a vocal critic of Wirecard and BaFin’s conduct thus far.

In spite of EY’s apparent misconduct, de Masi thinks it’s not clear whether EY would even be on the hook for its actions in Europe, beyond a fine of “a few million Euros.” (...)

Everyone I spoke with — De Masi, James Cox, Richard Murphy, and others — discussed finding ways to remove auditing responsibilities from companies who are paid directly by the firms they audit. (...)"