Wirecard says a forensic audit of its earnings by KPMG found no evidence of balance sheet manipulation or wrongdoings, following months of media allegations of accounting irregularities at the Berlin-based payments processor.
The independent audit was commissioned after a series of rolling investigations by the Financial Times, which has accused the firm of inflating sales and profits at its businesses in Dubai and Ireland, called out dodgy accounting practices at its Singapore office and raised questions over the probity of recent acquisitions.
In a statement on production of the audit findings, Wirecard says: "Incriminating evidence for the public allegations of balance sheet forgery has not been identified. With respect to all four areas of the audit - Third Party Acquiring business (TPA), Merchant Cash Advance (MCA)/Digital Lending as well as the business activities in India and Singapore - no significant findings have been made, which would require an adjustment of the annual accounts 2016-2018."
However, the firm acknowledged that KPMG was not able to lay its hands on all documents required to proof the revenues in these years, because the required data are primarily in the control of third parties.
This revelation led to a 20% drop in the value of Wirecard's shares as investors reacted to an apparent lapse in transparency.
"Since Wirecard meanwhile controls the necessary data itself, more than 200 mio data relating to December 2019 sets have been provided to KPMG for a forensic audit," the firm states. "This audit has not revealed any deviations between the reported revenues and account balances."
KPMG has identified documentation and organisational weaknesses during the audit period, which the firm says it has already mitigated against in 2019 through the establishment of a Global Compliance Organization and with the support of external consultants.