Financial advocacy group "Finanzwende" voices criticism towards Wirecard's proposed action plan.
Former Green Politician Calls for Comprehensive Reforms in Financial Fraud Fight
Gerhard Schick, a former Green politician and board member of the "Citizens' Movement for a Financial Turnaround," has critically assessed Olaf Scholz’s action plan against balance sheet fraud. Schick believes that an investigative committee could lead to more comprehensive tightening than currently planned by Scholz.
Schick has proposed several measures to strengthen the oversight and regulatory framework concerning auditing firms and financial supervision.
Separation of Consulting and Auditing Services
Schick supports a clearer and stricter division between consulting and auditing activities within auditing firms. This aims to avoid auditors also providing lucrative consulting services to the same companies they audit, which can compromise their independence.
Limitations on Ownership Structures
He advocates for reforms that would restrict the ownership rights in auditing firms to avoid undue influence or the blurring of lines between management, consultancy, and auditing roles. This would help ensure auditors act more independently and focus solely on auditing tasks without conflicting financial interests.
Measures at BaFin (Federal Financial Supervisory Authority)
Schick calls for measures to enhance BaFin’s structural and operational independence from political and industry influence. He points out that BaFin needs more autonomy and resources to effectively supervise financial markets and prevent fraud.
He emphasizes the need for BaFin to operate with greater transparency and to be held accountable to ensure effective enforcement. This includes clear reporting mechanisms and oversight of BaFin's actions.
Strengthening BaFin’s powers to intervene early and decisively in cases of suspected balance sheet manipulations or financial misconduct is another key demand from Schick.
Schick suggests better coordination between BaFin and other regulatory bodies as well as across borders, considering the increasingly international nature of financial markets.
Overall
Schick argues that the action plan should not stop at cosmetic changes or incremental adjustments but must implement comprehensive reforms to ensure auditing firms operate without conflicts of interest and BaFin functions as an effective, independent watchdog against financial fraud.
He believes that such tightening is necessary to prevent investment scandals from following one after the other. In his E-mail to Finance Minister Olaf Scholz, Schick has proposed a strict separation of property rights for companies that audit balance sheets.
Schick has also called for personnel consequences at the financial supervisory authority BaFin and believes that the reform efforts do not go far enough. It is not clear from the provided information whether Scholz has made any changes to his action plan in response to Schick's criticisms or suggestions.
The criticism is directed towards Finance Minister Olaf Scholz's action plan against balance sheet fraud. Schick hopes that through an investigative committee, more comprehensive tightening will occur than currently planned by Scholz.
- other measures proposed by Gerhard Schick to address financial fraud include a stricter separation of consulting and auditing services within auditing firms to prevent potential conflicts of interest.
- In his call for reforms, Schick advocates for limitations on the ownership structures of auditing firms to prevent undue influence and ensure that auditors focus solely on their auditing tasks.
- Schick has urged for enhancement of the Federal Financial Supervisory Authority (BaFin) by proposing measures to increase its independence from political and industry influence, improve its transparency, and give it more power to intervene early and decisively in cases of suspected financial fraud.
