The Accountancy and Actuarial Discipline
Board (AADB) has cleared Ernst & Young UK (E&Y) of any
wrong doing in the relation to its audit of collapsed bank Lehman
Brothers’ European operations.

Following an 18 month investigation, which
began in October 2010, the AADB has decided to take no action
against E&Y or any individuals in connection with their conduct
in this matter.

The AADB said during the course of the
investigation, the team obtained and reviewed E&Y audit files;
hard copy documentation; information from E&Y staff members’
laptops and emails, and information from other regulators.

“The executive counsel considers that there is
no realistic prospect that a tribunal would make an adverse finding
against E&Y in the UK or members within that firm. The
investigation will therefore be closed and no further action
taken,” the AADB said.

The AADB also examined the use of transactions
known as Repo 105 and Repo 108, which have been identified as one
of the reasons that led to the collapse of Lehman Brothers and have
been revised by standard setters since.