EY to spend $2bn on improving audits after Wirecard scandal
EY will invest around $2bn (£1.4bn) over three years to improve the quality of its audits after the high-profile collapse of payments company Wirecard, according to the Financial Times who first reported the news.
The funding is part of a larger, and record, $10bn investment plan, announced by EY yesterday, to finance staff training and improve the company’s fraud detection capabilities.
EY, as well as the other Big Four auditors, have come under increased scrutiny over a series of scandals involving large, well-known businesses.
The highy publicised fall of Wirecard brought the quality of EY’s audits into question, as the auditor failed, over the course of a decade, to flag up signs of fraud.
Since the Wirecard fraud was exposed, EY has been embroiled in a number of auditing failures. The Financial Reporting Council (FRC) fined the company £2.2m just last month for shortcomings in its audit of Stagecoach.
Chief executive Carmine Di Sibio said, according to the Financial Times, that EY would invest $2.5bn between 2022 and 2024 in artificial intelligence technology, machine learning for Canvas, its audit platform and training in fraud detection for its staff.
The investment, Sibio reportedly said, would allow EY to conduct better, more efficient audits.