Siemens CFO Dr Ralf Thomas spoke to IAFEI Quarterly about the impact of the recent Wirecard scandal on Germany’s reputation as a financial centre.

What does the Wirecard scandal mean for Germany as a financial centre?

We are all shaken. Wirecard Is a shot for the financial centre. Then comes the question: how could it happen? At this point, I restrained myself with caution, because first of all much work for clarification must be done. And I do hope intensely that all involved parties will show themselves to be extremely responsible. Because when clarification cannot be achieved, then it is very difficult to do something again something like this so that it is not going to happen again.

What consequences will the scandal have?

We must fight for the reputation of the financial centre in Germany. The scandal is certainly a great practical test for the Stock Exchange. Because had you asked anybody two months ago where is one of the safest financial markets in the world, where something like this cannot happen, then not a few would have pointed at Germany. But I also wish that all will act with a calm hand and first of all clarify the facts, before a systemic solution will be searched for.

The supervisor is regarded as a weak spot?

This is not yet a solution, but only a description of the problem, if it is this way. One should include the relevant stakeholders in the discussion before proposing supposedly trivial solutions as a panacea. I am convinced that this can be achieved. But I am also convinced that this is not possible over a weekend.

You are alluding to the fact that the German federal government wants to cancel the contract with the German Financial Reporting Enforcement Panel, DPR-FREP?

For insiders it is not at all a surprise that the German financial reporting panel, only one person was mandated with examining Wirecard. The number of employees is very limited. And the way of working is external experts are mandated on a case by case basis.

Is it possible that financial statements control, organized under private law, could be taken over by the German Federal Financial Supervisory Agency, BaFin?

With a federally legal on the letterhead, one looks more powerful. But it is not always alone the supposed power (of authority) which leads to the right result. We have seen in other jurisdictions like the USA, where the supervisory agency SEC is effectively a quasi-combination of BaFin and DPR-FREP, that there has been no immunisation against large financial statements manipulations.

What lesson are we to draw from this other than more intensified supervision?

If it would be like this, and I emphasise that this is an assumption –  that criminal actions in the money transfer area would be the cause – then I think it would be logical to think about how forensic methods could be included in the day-to-day work in the corporations.

Siemens group has learned it the hard way, how important it is to have at every point of time full transparency over its own financial cash flows. Our internal audit uses where it appears necessary forensic methods. It would not bother me at all if my external auditors or the DPR-FREP would also proceed in a forensic way if this then helps.

The external auditors are on the defensive?

External auditors are to a great extent depending on what the management is presenting to them. Naturally, they must for instance examine documents but this is not so easy anymore in an increasingly digital world. We probably have to get adapted to the same algorithms with which blockchain gets produced and opened in reverse for tracking. These are naturally also big steps from a legal point of view.

Is your relationship to EY’s external auditor of Siemens group changing?

The question assumes first of all presumption of innocence. For me, it is not recognisable that the EY team which has done a good job at Siemens group for many years could have deficits of any form.

The objective of a capital return of 15-20% has been missed by Siemens for many years. Are you annoyed by this?

It would be more beautiful if we would always be within the target range. But to be annoyed in this sense: have we done anything wrong? This I do not see. We have always presented in a transparent way which influence acquisitions would have on the capital return. When we give an outlook for the next business year we shall name a reasonable target range.

Are you

Tell your story on our

Follow CFO Talks

CFO Talks

Quick links

The Workspace at The Club
Cnr Pinaster Avenue and 18th Street
The Club Shopping Centre, Second Floor
South Africa

The Workspace
Melrose Arch
44 Melrose Boulevard
South Africa

Tel. 012-643-1800 |

Scroll to Top