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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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