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The Big Four – Accounting firms under scrutiny | DW Documentary



The Wirecard scandal brought the role of big auditing firms into focus. Their work is supposed to create trust in companies. But are appearances deceptive?

EY, PwC, KPMG and Deloitte: these “Big Four” auditing firms are hardly household names. Yet they play a key role in the global economy.

They have also all been at the center of a number of major financial scandals. For ten years, auditors at EY (Ernst & Young) certified Wirecard’s annual financial statements. They failed to uncover that a network of fraudsters were using accounting tricks to write billions into Wirecard’s books over several years.

Hundreds of Wirecard employees lost their jobs, and thousands of investors lost a total of €4.5 billion. Why didn’t the auditors recognize the fraud? Were they negligent, overextended?

The Big Four dominate the global audit industry, and their vast knowledge of company- and tax-law making them indispensable. Because growth opportunities in auditing have largely been exhausted, the Big Four offer a raft of consulting services, not only to the companies they audit but also to governments. Have the Big Four become too powerful — even out of control?

This documentary explores the role auditors played in the Wirecard scandal, investigates potential conflict of interest within the Big Four, and sheds light on the companies’ role within a complex web of political and economic dependencies.

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48 thoughts on “The Big Four – Accounting firms under scrutiny | DW Documentary”

  1. I'm sorry but why did the elderly guy invest his savings in only 1 stock? That's too risky considering his age and quite stupid. Unfortunately he had to learn a hard lesson .

  2. I have been teaching accounting fraud and ethics for 37 years. There's never a shortage of material. ie smart people doing stupid stuff. Why not? Ever heard of "The Golden Rule." He who has the gold makes the rules. ie, companies have the gold, auditors want it ==>> auditors will never be independent. If companies paying the auditors is OK then why don't restaurants pay the health inspector? In other words the fundamental flaw in the world-wide audit profession is that you can't be independent of someone who's paying you to do the work. How do we know? Because every time there's a huge fraud, think Great Depression 1929-1941 created the Securities & Exchange Commission and Enron created Sarbanes-Oxley, mortgage meltdown 2008011, regulators make up new rules, politicians pass new laws "So this can NEVER happen again." Then 10 years later. It happens again. And it will ALWAYS happen until the client's don't pay for the audit.

  3. The "system" is actually the workings of a relative few individuals … who should be named.
    The decision makers should be known.
    Get rid of the bad apples … at the top of the tree.
    The public needs explanations to be much less deliberately ambiguous.

  4. The ordeal is that big tickets are doing all tricks in all fields of lucrative margins; then they throw it on poor or weak countries or local tax payers. the next ruling party can not question some things even to their own party. when such thing is order of the world, eruptions in the form of Enron were order of the day in India way back in 1990s; though news papers suggest non transparency of Dabol power project. Ultimately news agencies have become mute spectators; or become co partners in NPA creation by Banks. Now there is Cryptos where from money is coming and where it is going , God only knows. Block chain links when matured, legal issues will take long time or country specific legal policy will block judgments in other countries. if I am not responsible for some thing; it is not my fault. Where does the vigilance exit. What is persona grata?

  5. Looking at the guy building guitars, it is almost touching how naive German small investors are when they leave the safe environs of their local building societies savings accounts. He violated or more likely, didn;t know one of the first rules of investing: diversify, diversify, diversify.
    Putting nearly all his money in one basket, it is almost guaranteed to lead to a bad outcome.

    I don't need an auditor to tell me that.

  6. Government auditor would be useless fools. Execute those found guilty of fraud or negligent auditing is the most effective solution with a small highly motivated highly skilled highly payed team of Psychopath financial experts randomly (or tip offs) swooping in to do highly detailed forensic audits of the audits.
    Rewards for shopping on firm's and accountants to.

  7. And he put all his money into one stock . . . Do we not all know how that tale always ends? I would feel sorry for him, if not for the sheer stupidity of putting all his eggs into one basket.

  8. lol would a audit company with account to audit finance companied compromise their $100 million fees . ps lol there is always a disclamer by auditer at end of audit all information was based on information provided at the time

  9. 12:30 is complete madness. Really, it is in the interest of the firm itself to be properly, thoroughly audited? By that logic, it is also in the interest of the firm not to commit fraud.

  10. "who orders music, pays for it", same with accounting – company pauys for it, so they tell what to do and what to inspect and where… pretend none noticed it. would be more realistic if all this would be done by goverment owned company, institute, but agan, corruption can get there to. many examples of failed companies and accounting exists and there will be more in future. scams, avoiding taxes, cooking up the books…. it all will remain in society as… human nature is greed. no matter how many people look into one company, they cant figure out schema someone has made up and none has seen before.

  11. 27:22, That's actually really interesting. The auditor/consulting firms are covering their own hides by giving the best legal advice for legal tax evasion. It sounds like they have a fiduciary responsibility the way he's saying they could be on the hook for their advice.

  12. I worked a project with a client that was using PWC as an IT consultanting firm. I was hired specifically for my expertise with a COTS product. I was ignored by the management team that had hitched itself to PWC as well as the PWC development team. That is until a few months before the product was supposed to launch. I was handed paperwork explaining how the developement team was going to handle connecting to the COTS product. It was obvious that the PWC team had not even looked at any of the COTS documentation a day in their life. Well, we didn't launch. That product was shelved, because the previous phases product which had launched a month after I came on for the phase 2 product was failing so spectacularly that state regulators had become involved. Phase 2 was eventually scrapped entirely. I moved on to the next disaster involving mixing auditors and their clients.

  13. Geez we ain’t safe from government robbing us of more taxes and companies that we invest in robbing and lying to us. Ain’t no chance of us getting rich when we are being double stabbed

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