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Despite a ban on audit engagements for listed companies in Germany, Ernst & Young has signed up the first new audit client listed on the Dax since the collapse of payments group Wirecard.
Biotech group Qiagen, which is listed in New York and Frankfurt, will hire a Big Four accounting firm as its new group auditor from January, when it will replace KPMG, which has held the role for a decade.
Ernst & Young accepted the mandate just months after it faced a two-year ban in Germany from taking on new listed audit clients over an alleged breach of its professional duties in connection with its audit of Wirecard. It collapsed due to an accounting scandal.
The authorization of Qiagen, which has annual revenue of 2 billion euros and a market capitalization of 10 billion euros, highlights the limitations of audit regulation in European countries.
Although Qiagen’s European operating headquarters are in the German town of Hilden near Dusseldorf, where the company is one of 40 members of Germany’s blue-chip Dax index, it was incorporated in the Netherlands and moved its legal headquarters in 1996. To Venlo.
“We are a Dutch registered company with global shares listed on the New York Stock Exchange in the United States and Germany,” Qiagen said in a statement.
Germany’s audit regulator Apas did not immediately respond to a request for comment.
The Wirecard fraud has plunged Ernst & Young Germany, which has been providing substandard audits to the payments group for nearly a decade, into crisis. Despite repeated whistleblower complaints and critical media reports, the company failed to realize that €1.9 billion in corporate cash and half of Wirecard’s revenue were fake.
After a multi-year investigation, Apasi concluded that Ernst & Young’s audits were “at least” negligent and in some cases grossly negligent, the Financial Times previously reported. However, it did not determine whether the company acted with criminal intent.
Qiagen told the Financial Times in a statement that it had “conducted a thorough review of a small set of global audit firms that could work for it” given the requirement to meet US and EU standards.
The company added that at Qiagen’s most recent annual shareholder meeting in June, shareholders “voted 99.9% in favor” of EY. It formally authorized Ernst & Young Accountants LLP, the Dutch arm of Ernst & Young, but also signed an engagement letter with the German arm of the Big Four accounting firm.
EY lost a series of high-profile German audit clients in the wake of the Wirecard scandal, including Commerzbank, Deutsche Telekom, DWS and state bank KfW, and failed to win any new mandates even before the two-year ban officially came into effect. .
The company overhauled its German legal structure to separate audit and advisory services, leading to accusations from former Wirecard shareholders over a potential divestment that they claim would make it illegal over alleged flaws in an audit of the defunct payments group. It becomes more difficult, if not impossible, to file a damage claim.
Former investors and Wirecard administrators are suing EY for billions of euros in damages, in a slow-moving and protracted series of lawsuits whose outcome remains uncertain.
Sources familiar with the matter told the Financial Times that Ernst & Young is seeking to carry out a series of additional high-profile audit assignments in Germany from 2026, including pharmaceuticals and agrichemicals group Bayer, retailer Metro and holiday operator Tui.
Ernst & Young declined to comment.
