Accountants face Anglo hearing
Top accountancy and auditing firm Ernst & Young is facing a disciplinary hearing at an industry watchdog over claims it failed to identify rogue operations at Anglo-Irish Bank.
The company must address three key deals in the bank's 2008 accounts including a 7.45 billion euro overnight deposit from Irish Life & Permanent and 87 million euro loans held by disgraced ex-chairman Sean FitzPatrick.
Special investigator John Purcell has also ordered Ernst & Young explain why it did not ensure disclosure of a loan to former Anglo director Willie McAteer.
In a statement, the accountancy firm said it fundamentally disagrees that it has a case to answer over its handling of Anglo's books.
"This is a preliminary stage of the process and, for the avoidance of doubt, there has been no adverse finding made against Ernst & Young in respect of the audit of Anglo-Irish Bank. We will vigorously defend our work," Ernst & Young said.
John Purcell, one of the country's top watchdogs, was called in to investigate by the complaints committee of the Chartered Accountants Regulatory Board (Carb) in February 2009. Mr Purcell, the state's former Comptroller & Auditor General, found there was prima facie evidence of a case to answer on three major errors in Anglo's 2008 accounts.
Ernst & Young will be called to answer in front of Carb's Disciplinary Panel.
The company insisted it did not encourage or advocate any of the rogue Anglo transactions in any way. And it added that any audit depends upon the openness, honesty and transparency of the management of the company being inspected.
Anglo's former management is being investigated on suspicion of withholding of information from auditors.
Mr Purcell said there was no case to answer on other grounds including that Ernst & Young was unaware of the Maple Ten deal, a golden circle of investors embroiled in a 300 million euro loans-for-shares scam to stabilise Anglo's share price.