Recent Audit Debacles
Evergrande’s debt-driven model for large-
scale real estate projects faced liquidity risks
especially after China’s “three red lines” policy
restricted excessive borrowing. Its aggressive
expansion and reliance on pre-sale properties
for cash flow led to unsustainable debt levels.
Carillion used aggressive revenue recognition,
booking profits on incomplete projects based on
unrealistic assumptions. Heavily reliant on debt,
its financial statements hid significant liabilities,
masking the company’s severe financial
instability from investors and stakeholders.
Wirecard, once a fintech leader, falsified
accounts by claiming €1.9 billion in nonexistent
cash. Its questionable profitability relied on third-
party acquirers in Asia and the Middle East,
which were used to conceal losses and fabricate
revenue, creating opaque operations.
large portion of the $6.5 billion raised through
bonds (2012–2013) was siphoned into private
accounts via offshore shell companies.
Government officials, including Prime Minister
Najib Razak, facilitated the misappropriation,
with Najib receiving $700 million, misleadingly
labeled as “donations” to avoid scrutiny
Pescanova hid €3.3 billion in debts—twice
the declared amount—by using over 100
subsidiaries, some with minimal ownership, to
keep liabilities off its balance sheet. It falsified
billing and manipulated records to present a
misleadingly positive financial image to investors
and banks.