Revisiting Corporate Governance with Wirecard in the post-Enron Era

This study compares two appalling corporate scandals, the Enron scandal in the US and the Wirecard scandal in Germany, to provide new insights into the efficacy of corporate governance. While many corporate governance reforms were introduced in the post-Enron era both in the US and the rest of the world, an Enron-like corporate scandal, Wirecard, has raised new concerns in the corporate governance domain. Both Enron and Wirecard cases involve accounting frauds, poisoned audit relations, and disarmed corporate governance. Focusing on Wirecard’s corporate governance practices, we find evidence that Wirecard used corporate governance reports and disclosure statements in the opposite direction by following a “governance-washing” tactic as part of their fraud strategy; instead of implementing their actual contents. Shocking financial markets in Europe almost two decades after Enron’s collapse, the Wirecard scandal indicates implementation gaps once again at all corporate governance levels