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KPMG says Wirecard obstructed audit


The Wirecard app is shown on a mobile phone. Photo Alex Kraus/Bloomberg

The Wirecard app is shown on a mobile phone. Photo Alex Kraus/Bloomberg

The Wirecard app is shown on a mobile phone. Photo Alex Kraus/Bloomberg

Wirecard continuously obstructed a special audit by accounting firm KPMG, a probe that ended up uncovering fictitious bookings on a massive scale and hastened the collapse of the once high-flying German mobile payment company.

Speaking at a parliamentary inquiry in Berlin yesterday, KPMG partner Alexander Geschonnek laid out how his company was confronted with "considerable obstacles" in its task to unpack Wirecard's accounts dating back several years.

Interviews with key counterparts were routinely delayed or moved, and accounting probes couldn't be fulfilled because the company didn't provide the required data, Mr Geschonnek said. As a result, KPMG struggled to fulfill its mandate, he said.

"It proved impossible to sufficiently comprehend the transaction volumes from 2016 to 2018," Mr Geschonnek, who works at the KPMG Forensic division, told the inquiry in Berlin.

KPMG billed Wirecard €5.8m for the audit, but ended up receiving just €5.3m, Mr Geschonnek said. At one point, KPMG even considered aborting the task outright, which involved as many as 40 accountants during a six-month process, he said.

The auditor's account is a key part of an investigation trying to understand why Wirecard collapsed, and if the company's alleged malfeasance could have been detected sooner. KPMG was brought on by Wirecard to do a special audit late last year, reviewing the accounts that had already been signed off by longterm auditor Ernst & Young.

One episode that has drawn particular attention was a trip by auditors and company management earlier this year to Manila in the Philippines, where Wirecard said its partner companies held large sums of cash from transactions in escrow accounts. But in Mr Geschonnek's telling, employees at the local bank were unable to produce the requested documents, raising suspicions.

By the time KPMG handed over its report, the auditor had concluded there was no evidence that funds in the escrow accounts in Asia actually existed, he said. Mr Geschonnek said he was "surprised" how even after repeated requests, Wirecard failed to provide proof the money was there.
Wirecard filed for insolvency in late June, after admitting that €1.9bn in funds never exis

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