Volkswagen chief executive Herbert Diess reportedly was told about the existence of cheating software in cars two months before regulators blew the whistle on what became a multi-billion euro exhaust emissions scandal, media reports said.

Reuters said a Der Spiegel story, based on recently unsealed documents from the Braunschweig prosecutor's office, raised questions about whether VW informed investors in a timely manner about the scope of a scandal which it said had cost it more than US$27bn in penalties and fines.

The news agency noted Volkswagen's senior management, which had denied wrongdoing, was being investigated by prosecutors in Braunschweig, near where Volkswagen is headquartered, to see whether the company violated disclosure rules.

US regulators exposed VW's cheating on 18 September, 2015.

According to Reuters, VW reiterated the management board had not violated its disclosure duties and had decided to not inform investors earlier because they had failed to grasp the scope of the potential fines and penalties.

Citing documents unsealed by the Braunschweig prosecutor's office, Der Spiegel said Diess was present at a meeting on 27 July, 2015 when senior engineers and executives discussed how to deal with US regulators who were threatening to ban VW cars because of excessive pollution levels.

Diess was VW's brand chief at the time and became chief executive of the VW group last April.

The US Environmental Protection Agency (EPA) had found unusually high pollution levels in VW's vehicles and was threatening to withhold road certification for new cars until VW explained why pollution levels were too high, Reuters said.

Diess, who had moved from BMW on 1 July, 2015, joined the 27 July meeting with Volkswagen's then chief executive Martin Winterkorn to discuss how to convince regulators that VW's cars could be sold, a VW defence document filed with a court in Braunschweig in February, shows, according to the reports.

Reuters could not obtain comment from multiple VW officials.

Following this meeting, Winterkorn asked Diess whether BMW too had installed "defeat devices" in its cars, Der Spiegel said.

Reuters noted that, in the US, legal engine management software is described as an "auxiliary emissions device" while the term "defeat device" is used to describe only illegal software.

Diess is said to have answered that BMW had not made use of such software, Der Spiegel said.

Volkswagen told Reuters on Saturday: "The contents of the discussion, where Martin Winterkorn and Herbert Diess were present, cannot be fully reconstructed, because the recollections of the people who were present partially deviate."

Volkswagen added it was the task of authorities and courts to evaluate the conflicting statements and to assess whether individual witnesses were credible.

Diess and Winterkorn left the 27 July meeting taking a presentation with them, Der Spiegel said.

A VW employee intervened and cautioned the managers it would be better if they were not in possession of the presentation, Der Spiegel said.

Volkswagen told Reuters the purpose of the 27 July meeting was not to discuss whether Volkswagen had broken US law but how to resolve the issue of whether new models would be given regulatory clearance.

Volkswagen argued that it had struggled to understand whether its software was in fact illegal, the defense document filed with the Braunschweig court shows.

On 31 July, 2015 Volkswagen hired a law firm to help the company understand its regulatory troubles, and lawyers were unsure whether the software would be deemed an illegal "defeat device" in the United States, VW reportedly said in the court filing.

The court filing further said that Hans Dieter Poetsch, Volkswagen's finance chief at the time, on 14 September, 2015 believed the potential financial risk from regulatory penalties tied to emissions would be around EUR150m ($172 million).

Poetsch is now Volkswagen's chairman.

Volkswagen on Saturday reiterated to Reuters it had not violated disclosure rules and had informed investors in a timely manner about the financial scope of the scandal when it published an "ad hoc" disclosure notice on 22 September, 2015.

Volkswagen also said that, although it had admitted to using defeat devices to regulators on 3 September, 2015 it had assumed that penalties would not exceed EUR200m based on the size of fines imposed against rival carmakers who had committed similar regulatory breaches.

Because the company had already accrued sufficient provisions for vehicle recalls to cover this amount, there was no need to inform investors that profits could take a further hit before September 2015, Volkswagen's court filing said, according to Reuters.