German prosecutors are filing charges against ex Wirecard CEO Markus Braun.
Wirecard’s recently-departed boss turned himself in to police in Germany. He’s been charged with “presenting false information” in connection with an ongoing investigation into Wirecard’s unscrupulous accounting practices.
- Oops. The investigation that resulted in Braun’s arrest started when auditors discovered that roughly $2 billion was missing from Wirecard’s books…
- Cooked books. Wirecard generated false business through third-parties in order to make the company look larger and more profitable.
What can we learn from this situation?
The Wirecard case is another example of overlooked shady accounting practices. Some up-and-coming companies use complicated accounting techniques to make them look more favorable to investors.
When considering an investment, always understand what you are buying.
Pay close attention to the company’s Generally Accepted Accounting Principles (GAAP) financial statements because those are the least subject to manipulation.
- If there’s smoke, there’s fire.
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