Even before the auditing authority APAS has completed its eagerly awaited decision on the consequences of the Wirecard scandal, four of the auditors affected by the investigation have resigned their professional license.

They are no longer allowed to work as auditors, but they no longer have to fear sanctions from the APAS.

The abbreviation of the authority subordinate to the Federal Office of Economics and Export Control (BAFA) stands for Auditor Oversight Body.

The Chamber of Public Accountants (WPK), which keeps the professional register of public accountants, confirmed to the FAZ that four of the people previously entered in the register had resigned their license as public accountants in January.

The WPK did not comment on the reasons for this step.

The “Handelsblatt” had reported on the resignation with reference to lawyers and also mentioned a statement by the APAS, according to which the authority had originally investigated twelve auditors and is now only conducting proceedings against eight auditors.

Apparently those affected expect such severe sanctions that they would rather have given up their approval beforehand.

But it is also possible that they want to avoid an even more lengthy procedure.

Historic accounting scandal surrounding Wirecard

In the wake of the historic Wirecard scandal from 2020, APAS is conducting mammoth proceedings against the auditing company EY and against originally 12 current and former EY employees.

The procedure is intended to clarify whether the auditing company and the auditors have violated their professional obligations as part of the balance sheet audits of the scandalous company Wirecard.

The former Dax company went bankrupt in 2021 after a balance sheet hole was revealed that EY had warned about too late.

EY had rejected the blame and emphasized that Wirecard had cheated.

The APAS procedure revolves around the audit of Wirecard's annual financial statements and consolidated financial statements for the years 2015 to 2018, including Wirecard Bank.

The APAS has evaluated the extensive working papers of the examiners and granted the examiners affected by the investigations, in some cases an extensive legal hearing.

As the Federal Office BAFA, which is responsible for the supervisory authority, announced last week, the decision in the Wirecard proceedings against EY is expected for the end of March.

Meetings of the APAS decision-making chamber took place in January.

At these meetings, the APAS employees directly entrusted with the investigations report internally on their findings.

If the APAS comes to the conclusion that the EY auditors responsible for Wirecard have violated their professional duties, serious sanctions are possible.

These could not only affect individual auditors, but also the auditing company EY in Germany.

For example, the authority can prohibit auditors from practicing their profession for a period of 3 to 5 years or even permanently exclude them from the profession.

It is also possible to prohibit an accounting firm such as EY from working for public interest clients for a period of up to 5 years.

This would mean that EY would no longer be able to audit publicly traded companies or large banks and insurers during this period.

After its decision, the APAS will send the relevant notifications to the persons concerned.

They can object to the decisions and go to court against the decision of the APAS.

So it will probably be some time before possible sanctions become fully legally binding.