Auditing company EY accused Wirecard of committing an "elaborate and sophisticated fraud" in comments on Thursday.

It came soon after the scandal-hit German payments provider filed for insolvency and its CEO was arrested.

"There are clear indications that this was an elaborate and sophisticated fraud involving multiple parties around the world in different institutions with a deliberate aim of deception," EY said.

German Finance Minister Olaf Scholz said on Thursday that Wirecard's debacle "must be a wake-up call that we need more oversight, more controls" over financial firms. 

"The scandal is unparalleled in the financial world," Scholz added. 

Read more: Former Wirecard CEO Markus Braun arrested

Missing billions

EY had previously sounded the alarm during the audit of the 2019 financial statement, which showed that the firm could not account for €1.9 billion ($2.1 billion).  

The €1.9 billion was supposed to have been held by two banks in the Philippines. But earlier this week the country's central bank confirmed that the money had not entered its financial system.  

CEO Markus Braun was subsequently detained on suspicion of inflating the company's balance sheet and revenues to make it appear stronger and more attractive for investors and customers.  

Three other managers are also under investigation. 

'The moneys gone' 

Wirecard's creditors have little hope of recovering some €3.5 billion euros that the firm owes, sources familiar with the matter told Reuters news agency.  

"The money's gone," one banker said. "We may recoup a few euros in a couple of years but will write off the loan now." 

Things also looked grim for shareholders. Wirecard shares have lost 98% of their value since EY refused to sign off on the firm's financial statement last Thursday. 

German law firm Schirp & Partner told Reuters that it planned to file class actions against EY on behalf of shareholders and bondholders, now that Wirecard had gone bust. 

"It is frightening how long Wirecard AG was able to operate without being objected to by the auditors," partner Wolfgang Schirp said.

Wirecard's fall from grace began last year, when a series of reports in British newspaper Financial Times uncovered accounting irregularities in its Asian operations.  

Founded in 1999, the Munich-based had come to edge traditional lender Commerzbank out of the DAX 30 index and was once heralded for its innovation. 

Germanys Economy Minister Peter Altmaier has called for a thorough investigation, warning that the Wirecard scandal could erode confidence in the country's finance sector.

jcg/aw (Reuters, AFP, AP, dpa)