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June 24, 2012

E&Y UK cleared over Lehman audits

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.

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