Wirecard, blockchain and artificial intelligence: Cardano aims to transform company financial audits

The aim is ambitious: to move from a model that depends on trust in institutions to one where information can be checked directly, including by authorized external parties.

This perspective takes on particular relevance in light of one of the biggest financial scandals of recent years: the Wirecard affair. The German digital payments company collapsed in 2020 after a shortfall of 1.9 billion euros was discovered.

The Wirecard scandal: 1.9 billion euros that were never there

The Wirecard scandal is one of the clearest examples of the shortcomings of traditional auditing systems.

For years, Wirecard said it held substantial cash reserves in trustee accounts in Asia. But in June 2020, the company admitted that the 1.9 billion euros reported in its financial statements probably did not exist.

The issue was not just the complexity of the financial operations. It was also how difficult it was to verify the information supplied to the audit firm.

The investigation found that documents used to attest to the bank deposits were not genuine. Some Philippine banks denied any connection to Wirecard and confirmed that the certificates presented were false.

Gregaard says the verification process was the weak link: receiving a document that appeared to come from a bank was not enough. It was necessary to check directly that the bank had issued the certificate and that the funds were actually there.

The case shows that even a system based on auditors, certifications and independent checks can fail if the original information is not verified at its source.

The question, then, is how to build a system that makes it much harder to falsify financial information.

Blockchain and company financial statements: Cardano’s approach

The answer, according to the Cardano Foundation’s CEO, is not simply to put company financial statements on a blockchain.

The transformation must extend to the entire system used to produce, certify and verify financial data.

A public blockchain can record information transparently and immutably, enabling authorized parties to review transactions and trace their history.

For instance, this could allow an organization’s transactions to be checked without having to visit its offices or request extra documents each time.

Gregaard points to the Cardano Foundation as an example: an investor could access the organization’s financial information, including Treasury positions and personnel expenses, through verifiable data and third-party attestations.

The distinction matters: the aim is not to make all confidential information public automatically, but to let people with the necessary permissions verify that it is authentic.

Blockchain can therefore provide infrastructure for transparency and traceability, while digital identity systems can establish who created information, who certified it and who is allowed to view it.

The Lehman Brothers collapse and the standard for identifying companies

Another notable part of Gregaard’s argument concerns the collapse of Lehman Brothers in 2008.

The crisis exposed a structural problem in financial markets: large institutions operated through many legal entities, subsidiaries and contractual relationships that were not always identified consistently.

Reconstructing financial exposures and determining which parties were involved in particular transactions became extremely difficult.

The need led to the Legal Entity Identifier (LEI), a unique code for identifying legal entities that participate in financial markets.

The system was developed through initiatives promoted by the Financial Stability Board at the request of the G20 in 2012. The Global Legal Entity Identifier Foundation (GLEIF), based in Switzerland, was established in 2014 to support its implementation.

The LEI enables parties to a financial transaction to be identified accurately and information from different sources to be linked.

Gregaard sees this as a concrete example of how a crisis can speed up the development of financial infrastructure. The next step is to combine these standards with blockchain technology and interoperable digital identity systems.

Importantly, the LEI does not necessarily rely on blockchain; it is a standard that can also be integrated into traditional infrastructure. Blockchain could, however, provide additional ways to verify and trace information.

Agentic AI and blockchain: the future of financial audits

Combining blockchain with agentic artificial intelligence could make corporate controls more efficient still.

AI agents are systems that can carry out certain tasks autonomously, analyze information and flag anomalies according to defined rules and objectives.

In accounting, they could monitor an organization’s transactions continuously, identify unusual activity and alert managers when potential irregularities arise.

Many auditing processes today rely on periodic checks and sampling: auditors choose some transactions to review, without necessarily examining every one.

With suitable digital infrastructure, however, it could be possible to analyze far more operations—potentially the entire accounting flow.

The benefit would be not just greater speed, but also the ability to spot anomalies before they turn into problems that are difficult to resolve.

For this approach to work, AI agents must also be able to verify the identities of the parties they deal with. An autonomous system needs to know whether information comes from a bank, a company or a genuinely authorized party.

That is where verifiable digital identity comes in: blockchain can record proofs and make operations verifiable, while digital credentials can establish the reliability of the identities involved.

Blockchain’s real challenge: trusting the data

Gregaard does not overlook a key issue: blockchain on its own cannot eliminate fraud.

A transaction recorded on a blockchain can be checked and cannot be changed arbitrarily, but that does not prove the information entered was accurate in the first place.

If someone records false information, the technology can ensure it is not changed afterward, but it cannot necessarily establish that it was true when entered.

This is the issue known as the reliability of data from the outside world, often called the oracle problem.

That is why digital identity and third-party attestations are essential.

It is not enough to know that information has been recorded. It must also be possible to show who produced it, which authority certified it and what process was used to verify it.

The issue matters even more when fraud may be organized by people inside the very institutions involved.

Even an organization with advanced technology must therefore deal with individual accountability, controls and governance.

Cardano’s focus on verifiable transparency

Gregaard’s vision aligns with the Cardano Foundation’s strategy of promoting blockchain as infrastructure with applications beyond cryptocurrencies.

One concrete example is Reeve, the accounting and financial reporting solution unveiled by the Foundation.

Reeve allows accounting events and financial information to be recorded on the blockchain, creating a transparent, immutable ledger that helps trace operations and verify data.

The platform is designed to make information more accessible to stakeholders while remaining compatible with the ERP systems companies already use.

Alongside Reeve, the Cardano Foundation is developing digital identity solutions, including Veridian and its associated verifiable identity ecosystem.

The aim is to create infrastructure that allows data, identities and transactions to interact without necessarily relying on a single central intermediary.

This is particularly important for the future of digital finance: blockchain may have limited value in corporate and institutional settings without reliable identification systems.

From trust to verification: finance’s challenge for the future

Gregaard’s message is clear: financial transparency in the future will depend not only on the spread of cryptocurrencies, but also on blockchain’s ability to address practical problems in traditional economic systems.

Distributed ledgers, verifiable digital identity and artificial intelligence could together reshape how companies, investors and auditors engage with financial information.

A fundamental challenge remains, however: technology must be supported by shared standards, independent checks, clear accountability and effective governance systems.

Blockchain cannot stop someone from lying, but it can make it harder to conceal a transaction’s trail and easier to verify who is responsible.

Source: en.cryptonomist.ch. Adapted by NBTC.