Why Volkswagen Investors Are Saying ‘No Thanks’ to EY as Auditor

Volkswagen's May 16, 2025, Annual General Meeting is turning into more than just a routine vote. It's shaping up to be a firecracker event. Why? Because some shareholders are straight-up saying “no way” to Ernst & Young (EY) returning as auditor, and they’ve got receipts. This isn’t just about bookkeeping. It’s about the lingering stink of the Wirecard scandal, shareholder power plays, and whether Germany’s corporate oversight is ready to level up. And here’s the kicker—EY’s problems aren’t confined to the audit world. Over in the U.S., its consulting arm is wobbling, too. For the third year in a row, EY-Parthenon has told new grads to sit tight until at least March 2026, thanks to “uncertain market conditions.” So, while the firm tries to convince Volkswagen it’s audit-ready, it’s also hitting pause on fresh talent in its advisory pipeline. That’s not exactly a confidence booster. So, buckle in, this one’s spicier than a Wall Street hot take during earnings week.

A Look Back at the Wirecard Dumpster Fire

Remember Wirecard? Back in 2020, it was the fintech golden child of Germany, until it wasn’t. The company, once worth €24 billion, blew up spectacularly when it admitted that €1.9 billion (yeah, with a “b”) supposedly chilling in Asian escrow accounts... was pure fiction. Who was the auditor who gave Wirecard the thumbs-up for over a decade? EY. And their audit work wasn’t just sloppy, it was straight-up negligent. We’re talking forged documents, phantom merchants, and pre-paid cards supplied by Wirecard itself to “test” fake transactions. One audit check included a €9.95 subscription to an adult site and a few FIFA coins, paid for with Wirecard-controlled cards.

Even worse, EY missed numerous red flags, ignored internal probes (like “Project Ring”), and defended Wirecard’s sham operations long after doubts were widely publicized. When the whole thing collapsed, investors lost billions, execs got arrested or vanished (Marsalek is still MIA), and EY's reputation took a nosedive.

Why VW Shareholders Are Freaking Out

Fast-forward to 2025. Volkswagen wants to reappoint EY as its auditor, again. But shareholders, led by Berlin lawyer Dr. Wolfgang Schirp, are sounding the alarm bells.

Here’s their beef:

• Wirecard baggage: EY refuses to settle with investors and still hasn’t fully owned up to its failures.
• Shell game: EY’s German entity recently changed its legal structure, effectively shielding its assets in case of lawsuits. Translation? If something goes sideways, VW shareholders may be stuck with nothing but air.
• Accountability optics: Rehiring EY sends the wrong signal about VW’s stance on corporate governance.

Dr. Schirp didn’t mince words: “EY is one of those responsible for the Wirecard scandal... EY expressly refuses to comply with a request from the highest court of Bavaria.” Ouch.

Shareholders vs. the Boardroom

So, can shareholders stop the reappointment? The short answer: yes, but it’s an uphill climb. In Germany, auditor appointments go through this chain:

• The audit committee (part of the supervisory board) picks a preferred auditor.
• The supervisory board endorses that pick.
• The AGM shareholders vote on it.

Shareholders have the right to file countermotions, like the one submitted by Schirp’s camp. But unless they gather serious backing—especially from institutional investors—the board’s pick usually sticks. That said, public pressure, media scrutiny, and growing investor activism (especially from U.S.-based funds) might just tilt the scales.

The Stakes Are Hella High

This isn’t just about who crunches VW’s numbers next quarter. This vote is a litmus test for:

• Volkswagen’s credibility post-Dieselgate.
• EY’s post-Wirecard comeback tour.
• Audit quality and investor trust across Germany and the EU.

Potential Outcomes:

• Shareholders Win (Big If True): EY gets the boot. VW scrambles for a new auditor. This would be a rare slap to a Big Four firm, and a warning shot for audit quality everywhere.
• Board Pushes It Through: EY stays, but VW’s governance credibility takes a hit. Expect media blowback and closer scrutiny from regulators and watchdogs.
• Compromise City: VW might try to smooth things over by proposing joint auditors or a transitional year with EY while seeking a replacement.

Either way, the drama ain’t over.

A Transatlantic Perspective

In the U.S., this would’ve been a full-blown shareholder uprising. Post-Enron, the Sarbanes-Oxley Act beefed up audit accountability big time. If a firm with EY’s Wirecard rap sheet tried to audit a major U.S. public company, you’d have proxy advisors, class-action lawyers, and shareholder activists going full throttle. That’s what makes this situation so fascinating: Germany’s governance norms are evolving, and global investors are demanding change.

Lessons We Can’t Afford to Miss

This case isn’t just a juicy boardroom drama. It’s a masterclass in:

• Auditor independence: Cozy relationships = compromised oversight.
• Investor rights: Shareholders can—and should- hold auditors and boards accountable.
• Regulatory muscle: EY’s €500K fine and 2-year audit ban in Germany were just the start. Apas (Germany’s audit watchdog) is still investigating multiple partners.
• And the hits keep coming: DWS, a Deutsche Bank unit, hired EY as its auditor... while also suing them over Wirecard. If that’s not the definition of mixed signals, what is?

Stay Tuned

Volkswagen’s AGM might just be the start of a new wave of investor-led accountability in Europe. Whether EY stays or goes, the pressure is on. And as Wirecard taught us, when watchdogs snooze, investors lose. The ripples from this vote will be felt far beyond Wolfsburg, from the boardrooms of DAX heavyweights to Big Four corner offices across the Atlantic. If shareholders flex their muscles, it may ignite a new era of accountability, one where credibility isn’t inherited, it’s earned, audited, and constantly revalidated. Because if Wirecard taught us anything, it’s that when watchdogs nod off, the whole market pays the price. Want more no-BS breakdowns of what’s moving the markets and shaking up corporate finance? Hit that subscribe button for MYCPE ONE Insights.