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These troubled and scandal-ridden companies share the four major auditors



Wirecard is headquartered in Aschheim near Munich and faces a parliamentary investigation into the failure of payment providers this fall.

Christof Stache/AFP/Getty Images

This year, a German financial technology company lost US$2 billion, generated US$300 million in sales in a Chinese coffee chain, and discovered US$5 billion in undisclosed debt in two related companies listed in the UK. The shareholders of these companies need approximately $30 billion.

All of these have been audited by Ernst & Young. Last year, Ernst & Young also audited the office space company WeWork, which almost went bankrupt after conducting a planned initial public offering.


“We take all issues very seriously.”


—Andy Baldwin (EY)

Ernst & Young is one of the Big Four accounting firms, and its audit aims to make investors confident in the company’s performance. Ernst & Young’s missed the red flag, or did not actively pursue the red flag in some companies before the scandal, was largely based on outsiders’ concerns, which was a review of publicly available documents and interviews with people close to the event. Now, regulators are reviewing Ernst & Young’s work.

EY’s audit client facing financial problems is German payment processor Wirecard AG WDI,
+ 23.31%

WCAGY,
+ 16.75%
; Luckin Coffee Inc. LKNCY of China,
+ 3.62%
; Hospital operator NMC Health PLC NMHLY,
+ 2.33%
; NMC’s sister company Finablr PLC, which owns Travelex currency services.

see: The German parliament begins an investigation into Wirecard’s fraud scandal, and the government turns a blind eye to it

Ernst & Young stated that it insists on its own work and has high global audit standards. The company said it played a key role in exposing the fraud of the two companies, and said that Chinese regulators consider it prudent and independent.

An expanded version of the report appears on WSJ.com.

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