Last week the company Wirecard, a German payment processor and financial services provider, was all over the news for being at the center of a large financial scandal. TRR 266 researcher Thorsten Sellhorn, Professor of Accounting at LMU Munich and President of the European Accounting Association (EAA), has commented on the scandal in the press. He argues „it’s too early to say what happened at Wirecard – and why nobody prevented it, or at least discovered it sooner.” As is it “too early to point out the culprits before criminal investigations are resolved.”
Although it is too early to draw conclusions about what has happened and who is at fault, Sellhorn argues there is one conclusion we can already draw from this scandal: more transparency is needed. He argues that voluntary disclosure incentives do not seem sufficient. The case of Wirecard is yet another example of accounting scandals exposed in the past years illustrating the need for more transparency about firms, auditors and oversight bodies. He provides suggestions for the kind of information that companies could disclose to prevent a “breeding ground for corporate wrongdoing”.
Read Sellhorn’s analysis and comments in the press and in his EAA Blog:
- Associated Press Article: Wirecard scandal puts spotlight on German company regulation as featured in e.g. The New York Times.
- European Accounting Association (EAA) Blog: The Wirecard Scandal – Transparency is needed
- Interview Deutsche Welle Business (Video)