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Statement issued by the Chartered Accountants Regulatory Board (CARB) regarding the report of the Special Investigator

A meeting of CARB’s Complaints Committee took place on 13th September 2011 at which the Report of Special Investigator, Mr. John Purcell, concerning his investigation into Institute Member firm, Ernst & Young, in respect of their former role as auditors to Anglo Irish Bank, was considered.

In his Report to the Complaints Committee, Mr. Purcell certified that, in his opinion, there existed certain prima facie cases against the member firm.

The Complaints Committee referred those prima facie cases to CARB’s Disciplinary Panel by way of Formal Complaints under the provisions of Bye-Law 19.6 of the Disciplinary Bye-Laws of Chartered Accountants Ireland.

The Special Investigator certified that in his opinion there were prima facie cases against Ernst & Young in respect of their role as auditors to Anglo Irish Bank in respect of the following:

  1. Their failure to detect the scale of Mr. Sean FitzPatrick’s loans and their systematic refinancing over year ends and the lack of appropriate disclosure in the first set of Anglo’s Financial Statements for the year end 30th September 2008, which were signed on 2nd December 2008, or in Ernst & Young’s audit report thereon;
  2. Their failure to refer to the transactions in September 2008 between Irish Life & Permanent and Anglo in their audit report on the first set of Anglo’s 2008 Financial Statements, in the absence of appropriate disclosure in those 2008 Financial Statements;
  3. Their failure to ensure appropriate disclosure of a loan made to Mr. William McAteer, a Director of Anglo, in the first set of Anglo’s 2008 Financial Statements or in their audit report thereon.

The Special Investigator certified that in his opinion there was no prima facie case against Ernst & Young in their role as auditors to Anglo Irish Bank in respect of the following:

  1. The manner in which they dealt with the September 2008 transactions between Irish Life & Permanent and Anglo in their audit report on the second set of Anglo’s 2008 Financial Statements, which were signed on 19th February 2009;
  2. Their lack of awareness of the so-called “Maple 10 loans” when they issued their audit report on the first set of Anglo’s 2008 Financial Statements;
  3. The manner in which they dealt with the so-called “Maple 10 loans” in their audit report on the second set of Anglo’s 2008 Financial Statements;
  4. Their lack of awareness of the alteration of recourse terms on certain loans to four key management personnel of Anglo when Ernst & Young issued their audit report on the first set of Anglo’s 2008 Financial Statements.

Ends.

For more information contact Paul Daly, Communications Executive,

Chartered Accountants Regulatory Board.

Ph: 087-2235187

E: paul.daly@carb.ie

Relevant Link

John Purcell 2009 Press Releases