Wirecard Exposes Big 4 Accounting Lapses Endure Post-Enron
- Largest accounting firms are ‘very big political operators’
- Coronavirus has slowed momentum for reform too, experts say
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Two decades of financial disasters from Enron Inc.’s collapse in 2001 to Wirecard AG’s meltdown have left the Big Four accounting firms facing a major cultural problem that regulators may struggle to resolve.
The 1.9 billion euros ($2.1 billion) missing from Wirecard’s balance sheet brought the chief executive officer’s arrest, the German payments firm’s insolvency filing and a lot of finger-pointing. Some have blamed German regulator BaFin for its oversight failures. Wirecard’s auditor, Ernst & Young, called it an “elaborate” fraud that even a very rigorous probe may not have discovered.