BE132: The New Chairman of Wirecard Said the German Payments Company: Auditing Assignment, UOE, Singapore

Wirecard to beef up management amid fraud allegations; CEO to stay

The new chairman of Wirecard said the German payments company needed to strengthen its top management as it fights allegations of fraud and false accounting while giving chief executive Markus Braun a vote of confidence.

Mr. Braun’s contract expiring at the end of this year will definitely be extended, Thomas Eichelmann told Manager Magazine in an interview published on Wednesday.

Mr. Braun, 50, has had a difficult 12 months in which the Financial Times has alleged that Wirecard’s Singapore office committed fraud, and its finance team conspired to inflate revenue and profit at its subsidiaries in Dubai and Ireland.

Outside auditor KPMG was hired last autumn to investigate all the FT’s allegations and is expected to report back by the end of the first quarter. Wirecard itself denies wrongdoing.

Mr. Eichelmann, a former chief financial officer of the Frankfurt Stock Exchange elected chairman in December, said Wirecard needed to beef up both its management and supervisory boards by two members each to ease the burden on Mr. Braun.

“A management board member for personnel would make sense in my opinion, as would one for international marketing,” Mr. Eichelmann told Manager Magazine. “We could do with more capacity and competence in the supervisory board too.”

Austrian Braun has run Wirecard since 2002 and owns a 7 percent stake in it that is worth 1.1 billion euros (S$1.65 billion).

Assignment Questions:

Given the fraud and false accounting in Wirecard, critically discuss auditor’s responsibility in the detection of financial frauds in the company.

Your essay should not exceed 1,500 words in length and should be double spaced and wordprocessed.