PwC sloppiness 55 billion euros error

Eurozone

(Reuters) – The German government tried to deflect responsibility on Monday for a 55-billion euro accounting blunder that has exposed it to charges of ridicule for being inept and hypocritical after its steady criticism of Greek bookkeeping practices.

Finance Minister Wolfgang Schaeuble has summoned executives from the nationalized mortgage bank Hypo Real Estate (HRE) to explain how they made a simple accounting error that ended up raising Germany‘s total debt load by 55 billion euros.

Schaeuble, in the awkward situation of being humiliated by the windfall that will cut Germany’s debt levels, will also demand answers at a Wednesday meeting from the PwC accountancy firm that signed off on the report.

Schaeuble’s spokesman Martin Kotthaus tried to deflect any blame, saying the ministry received a certified statement from auditors that the balance sheets had been checked and approved. He said it was too early to tell exactly who messed up.

“It’s annoying, to put it diplomatically, when corrections of this dimension are necessary,” said Kotthaus, who was grilled at a news conference. “We had a certified audit of the annual accounts for 2010 and it said everything was in order.”

Kotthaus said the bank itself was responsible for its annual report.

The German media nevertheless mocked Schaeuble, saying the 55-billion euro accounting error put Berlin in the same category as the Greek government for failing to report accurate figures. Inaccurate reporting of Greek deficits contributed to the euro zone sovereign debt crisis that has hit Europe hard.

“Incredible but true,” wrote the Rheinische Post newspaper. “The nationalized bank HRE made a staggering 55-billion euro miscalculation. It’s scandalous that bank managers, certified public accountants and government supervisors made an error of this dimension. This kind of sloppiness reminds us of Greece.

via Germany mocked for 55-billion euro bank accounts error | Reuters

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