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May 15, 2011

E&Y fails to challenge Anglo Irish inquiry

Ernst & Young Ireland’s (E&Y) attempt
to halt the probe into its audits of the collapsed Anglo Irish Bank
prior to 2009 has been rejected by the High Court.

Justice Mary Irvine ruled that the firm had no
ground to end the two-year investigation by the Chartered
Accountants Regulatory Board (CARB) appointed investigator auditor
general, John Purcell.

According to media reports the judge also
ruled the firm had no arguable case to prevent a report by forensic
accountants into the conduct of the auditors to Anglo Irish Bank
being forwarded to CARB in the event of Purcell, finding that Ernst
& Young is liable to disciplinary action.

E&Y said it is disappointed by the
decision, claiming the investigation to date has been unfair
because reports leading to Purcell’s appointment ‘did not contain
valid complaints, failing to set out specific allegations,
including of misconduct, or to refer to codes of conduct, rules,
regulations and professional standards’, according to reports.

The CARB, the regulatory arm of the Institute
of Chartered Accountants Ireland, commissioned Purcell in 2009 to
look at elements of Anglo Irish Bank’s fall, including the
non-disclosure of loans worth tens of millions of Euros.

Purcell has been investigating certain
deposits made by Irish Life & Permanent through its subsidiary
Irish Life Assurance with Anglo during 2008, the treatment
of these deposits in Anglo’s accounts and the reporting to the
Financial Regulator.
He has also investigated the performance of E&Y audits of the
financial statements and accounts of Anglo Irish Bank in relation
to these transactions.

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