Wirecard scandal. A commentary on the biggest accounting fraud in Germany’s post-war history

Fabian Maximilian Johannes Teichmann, Sonia Ruxandra Boticiu and Bruno S. Sergi

Journal of Financial Crime, 2023, vol. 31, issue 5, 1166-1173

Abstract: Purpose - The purpose of this paper is to illustrate how the Wirecard scandal has highlighted the need for further reforms in Germany and Europe, exposing institutional and market oversight weaknesses, particularly in terms of market integrity and investor protection. Design/methodology/approach - To provide a comprehensive picture of the situation, this paper is based only on relevant studies, which focus on the topic of interest, namely, the context of the Wirecard collapse in June 2020. It also examines how internal and external governance and monitoring mechanisms failed to uncover major fraud within the German payments group earlier. Findings - This study shows that this is by no means an isolated or unpredictable incident, and the allegations of accounting fraud had been known for several years, thanks to warnings from theFinancial Times. In addition, the paper reviews the serious shortcomings revealed in the Wambach report. The report provided private details of the Wirecard audit and documents on the relationship between Wirecard management and the auditor. All of this can serve as a reference point for institutional and market oversight architecture in Germany and Europe and pave the way for future research. Originality/value - The paper contributes to the literature by highlighting the implications of the Wirecard scandal and the lessons that can be learned from what was one of Germany’s biggest corporate scandals especially at a time when many are already affected by the impact of COVID-19 on the entire financial services industry.

Keywords: Wirecard scandal; Financial sector; Lessons learned; BaFin; Wambach report (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jfcpps:jfc-12-2022-0301

DOI: 10.1108/JFC-12-2022-0301

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