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Deutsche Bank Accounting Head Probed Over EY Wirecard Audit

(Bloomberg) — Deutsche Bank AG’s top accounting executive, Andreas Loetscher, is being investigated over his role as the auditor of Wirecard AG while he was with his former firm, Ernst & Young, two people familiar with the matter said.



a sign in front of a building: LONDON, ENGLAND - OCTOBER 01: The Ernst & Young (EY) offices stand in 1 More London Riverside on October 1, 2018 in London, England. The government has called for a review of the British auditing industry after a series of scandals including the collapses of Carillion and BHS revealed serious failures in the auditing process. The 'Big Four' accounting firms, which are Deloitte, PwC, Ernst & Young (EY) and KPMG audit the large majority of the UK's largest listed companies. (Photo by Jack Taylor/Getty Images)


© Photographer: Jack Taylor/Getty Images Europe
LONDON, ENGLAND – OCTOBER 01: The Ernst & Young (EY) offices stand in 1 More London Riverside on October 1, 2018 in London, England. The government has called for a review of the British auditing industry after a series of scandals including the collapses of Carillion and BHS revealed serious failures in the auditing process. The ‘Big Four’ accounting firms, which are Deloitte, PwC, Ernst & Young (EY) and KPMG audit the large majority of the UK’s largest listed companies. (Photo by Jack Taylor/Getty Images)

Germany’s accounting regulator, APAS, is looking at his role as part of a review of EY’s auditing, said the people, who declined to be identified because the information isn’t public. Loetscher and three EY auditors are scheduled to testify at a parliamentary committee Thursday about their work for Wirecard. They are expected to invoke legal privilege and not answer any questions about their accounting work.

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Loetscher, a two-decade veteran at the accounting firm, oversaw the Wirecard audits for the financial years 2015 through 2017, filings show. He left in 2018 to become chief accounting officer at Deutsche Bank, taking over after the bank struggled for years with legal and regulatory mishaps.

No Evidence

APAS sent a letter to Berlin prosecutors, telling them that the auditors may have committed crimes. The document was forwarded to Munich prosecutors who are now looking into the matter.

EY said there’s no evidence of any criminal acts by its auditors. The firm declined to comment on the APAS probe.

APAS and Deutsche Bank both declined to comment. Loetscher’s lawyer Friedrich Schultehinrichs didn’t immediately reply to emails seeking comment.

Handelsblatt reported the APAS letter earlier on Thursday.

The parliamentary committee on Thursday questioned Alexander Geschonneck, a KPMG auditor who led a special probe that Wirecard itself commissioned last year.

Wirecard management sought to obstruct that audit, he told lawmakers. KPMG ultimately uncovered wrongdoing on a huge scale at the company, months before its collapse.

The electronic payment company filed for insolvency in June, the culmination of a stunning accounting scandal that led to the arrest of its former chief executive Markus Braun and the revelation that over $2 billion on its balance sheet likely didn’t exist. The Wirecard scandal has prompted questions about the role of the auditors and Germany’s financial regulator.

(Updates with KPMG auditor testimony in eighth paragraph.)

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