STATE-OWNED Anglo Irish Bank has appointed Deloitte as the lender’s external auditor following a tender process. The firm replaces Ernst Young as auditors.
Anglo announced the appointment of Deloitte saying the firm would begin auditing the bank for its 2009 financial year ending on September 30th.
Ernst Young had declared its intention to submit a tender to be rehired in spite of questions raised about its oversight, following a spate of scandals at Anglo Irish and a dramatic rise in bad debts which led to losses of €4.1 billion at March 31st, 2009.
The Garda, Financial Regulator, Director of Corporate Enforcement and the Irish Auditing and Accounting Supervisory Authority are carrying out separate investigations at Anglo.
The inquiries centre on hidden loans to the former chairman Seán FitzPatrick, back-to-back deposits totalling €7.5 billion with Irish Life Permanent and the secretive placing of a 10 per cent stake in the bank to 10 clients with non-recourse loans from the bank.
Anglo executive chairman Donal O’Connor has said that Ernst Young was not sacked when the bank’s new board put the audit contract out to tender. He has said the accountancy firm was invited to tender.
At the time the contract was put out to tender, Government sources privately questioned Ernst Young’s performance, particularly in light of the surge in loan losses since the State seized control of the bank in January. Ernst Young has maintained that it always did a good job in its audit work on Anglo. Sources close to the firm have said that all aspects of its work were “normal” in respect of audit findings.
The firm earned €9.1 million in fees from the Anglo audit over the past 10 years. The Government injected a further €827.7 million into Anglo this week in addition to the €3 billion already invested.
