Fourth Research Assignment, Wirecard due 0908
Posted: August 27th, 2021
Fourth Research Assignment, Wirecard due 0908
1-point max, 0.85 points for good work that meets requirements
Davies, Paul J. (2020, July 2). How Wirecard Went From Tech Star to Bankrupt. The Wall Street Journal, https://www.wsj.com/articles/wirecard-bankruptcy-scandal-missing-$2billion-11593703379
1. Summarize Davies (2020) in about 100 of your own words (no copying and pasting)[1]. Cite Davies (2020) at least once.
| According to Davies (2020), Marcus Braun is believed to have improved Wirecard Company from an unrecognized company to well-established incorporation dealing with Munich’s electronic payments. By extracting fees from online payment transactions, Wirecard managed to get returns directly used to buy up emerging firms and enter into partnerships. Davies (2020) posited that the company claimed to have processed more than $140 billion transactions yearly, which indeed surpassed most global payment firms like PayPal Holdings and Square Inc. It was unfortunate that the firm, which was recently valued at $14 billion more than any bank in Germany, filed for bankruptcy. There were some allegations than more than $2 billion got lost through the handling of third-party companies, which help the company operate in oversea territories (Davies, 2020). Nothing was lost from the allegations, except that the company, through its regular auditing firm, colluded with independent third-party companies to create an imaginary stream of revenue worth $2 billion. |
2. Who was the at-fault auditor of Wirecard? Explain in about 50 words.
| Ernst & Young was a regular firm that audited the financial reports of Wirecard. Nonetheless, it failed to approve of the missing $2 billion, claiming that it was not sure whether such cash ever existed in the company (Kinder & Storbeck, 2020). The auditing firm asserted that the independent third-party partners had created fake and non-existent revenue streams for Wirecard while in the full knowledge that the online electronic company did not have licenses to operate internationally. Indeed, Ernst & Young is entitled to receive a backlash from the public investors after it misadvised Wirecard to allege that the international fraud was intended to deceive investors into buying the company’s shares (Kinder & Storbeck, 2020). |
3. Optional: Reference and attach PDF printouts of additional sources. Be sure to also cite these sources in the answers above. The reference should be in the same format as Davies (2020) above.
| Kinder, T., & Storbeck, O. (2020, June 29). EY prepares for backlash over Wirecard scandal. Financial Times, https://www.ft.com/content/ae73160b-fd9a-4313-89f9-8fd70183158e |
[1] Never copy and paste without quotes, even if you cite the course. Citing with quotes is appropriate only if using the words of the source add special value. This should be rare.
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