German cabinet approves tougher oversight after Wirecard scandal | Reuters

The German cabinet passed a package of reforms to financial and accounting rules on Wednesday aimed at avoiding another Wirecard scandal amid criticism from opposition lawmakers who say the government’s measures do not go far enough.

Chancellor Angela Merkel’s conservatives and the co-governing Social Democrats (SPD) agreed to extend the powers of the BaFin watchdog to include the right to get information from third parties and conduct forensic investigations itself. The new rules also give BaFin the right to inform the public at an earlier stage about its actions on balance sheet control.

To avoid conflict of interest, the government wants to strengthen the independence of auditors by introducing a duty to rotate external auditors every 10 years at the latest. Berlin also sharpened legislation so that auditors can be made liable in civil law suits more easily in case of misconduct.

Wirecard’s demise has embarrassed Germany, which prides itself on a reputation for rectitude and reliability, amid criticism that authorities ignored red flags.

German cabinet approves tougher oversight after Wirecard scandal | Reuters

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