Auditors keep falling into the same trap | Financial Times

Last week, payments firm Wirecard admitted that €1.9bn of its cash probably never existed — and then it collapsed. It turns out that the German group’s auditors had failed for at least three years to request crucial account information from a Singapore bank where Wirecard said it had up to €1bn. Instead, EY relied on documents and screenshots provided by a third-party trustee and Wirecard itself.

To some, the story sounded remarkably familiar. In 2003, questions were swirling about Parmalat, a big Italian food group. Back then, Bank of America said that a document purporting to show that one of Parmalat’s offshore affiliates held €3.9bn in its account had been forged. Days later, Parmalat went into administration. Deloitte, the group’s main auditor from 1999 until its collapse, later agreed to pay $149m to the company and $8.5m to investors.

via Auditors keep falling into the same trap | Financial Times.