In the 2022 financial year, the EY audit, which attracted the attention of supervisors and the public because of the Wirecard scandal, audited significantly fewer important companies of public interest than in the same period of the previous year.

According to the business figures that EY published in December for the German market, the revenue generated from the audit of company balance sheets fell by 1.9 percent, while the consulting divisions grew strongly.

The EY financial year runs from July 1st to June 30th.

Mark Fehr

Editor in Business.

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The number of companies of public interest audited by EY has fallen significantly more sharply than audit revenue.

In this important customer group, the number of audit engagements processed in the 2022 financial year fell by a quarter to 135 engagements.

This is shown by a comparison of EY's transparency report published in October with the report from the previous year.

In its transparency reports, the auditing and consulting firm lists the public interest companies in alphabetical order every year for which it has carried out a statutory audit of annual financial statements and consolidated financial statements.

Mandates of great importance to the public

According to the Commercial Code, there is public interest in a company if it is listed on the stock exchange or if it is an insurance company or certain credit institutions.

The balance sheets of such clients must be checked particularly carefully, which is why the clients attach great importance not only to the professional capacities of the commissioned auditors, but also to their reputation.

It is not clear to what extent the sharp decline in EY's audit mandates has anything to do with the reputational damage suffered as a result of the Wirecard scandal.

EY justifies the recent decline in the number of audit mandates of public importance with the legally prescribed rotation.

This has ensured that some companies that had previously been audited by EY had to change auditors.

"We continue to experience great trust from our clients," emphasizes EY.

Business in Germany is developing stably, and utilization across all service lines, i.e. across all business areas, is high overall.

However, the rotation would have to ensure not only the loss but also the gain of orders.

If you add up the audit mandates of high public importance published annually by EY, there is at least one noticeable development: In the 2021 financial year, i.e. immediately after the Wirecard scandal, EY was able to significantly increase the number of its particularly important audit customers from 163 to 180.

In the 2022 financial year, on the other hand, the number of these mandates fell by 25 percent to 135.

However, the strong change is also due to the fact that a single loss of mandate can often lead to the loss of numerous entries on the order list.

This happens when a group's subsidiaries are no longer audit customers.

EY had to record the disposal of DZ Bank in the 2022 financial year.

Along with the large central institute of the cooperative financial group, numerous other companies belonging to it disappeared from the list at the same time.

This applies, for example, to the insurance group R+V, which belongs to the universe of DZ Bank and is now no longer checked by EY along with numerous subsidiaries.

The R+V Group also includes the insurance companies Kravag and Condor, each with additional subsidiaries, which were also removed from the list of EY audit customers in the 2022 financial year.

EY has lost the dwp Bank to other well-known audit mandates.

It manages the securities business of many Volksbanks and Raiffeisenbanks, savings banks and private banks.

EY is no longer responsible for examining the construction group Bilfinger, which is now being audited by competitor PWC.

EY lost the test mandate of the pharmaceutical company Evotec to the challenger BDO.

In the transparency report for 2022, EY admits that trust in the quality of its work has been damaged by the Wirecard scandal and points out that it has taken extensive measures to further increase the quality of the audit.

The auditing authority APAS will soon decide on penalties against EY for breaches of duty when auditing Wirecard's balance sheets.