E&Y to face disciplinary panel

An investigation into the conduct of Ernst & Young has found that the accountancy firm has prima facie cases to answer in respect of its role as auditors to Anglo Irish Bank.

John Purcell, who was appointed to lead the two-year old investigation by the Chartered Accountants Regulatory Board (Carb), has found the firm has questions to answer over its failure to detect the scale of Sean FitzPatrick’s loans and his refinancing of those loans before year end.

The report said the firm had failed to “detect the scale of Sean FitzPatrick’s loans and their systematic refinancing over year ends”.

The firm also needs to explain its failure to refer to the transactions in September 2008 between Irish Life & Permanent and Anglo in their audit report on the first set of Anglo’s 2008 Financial Statements.

The cases have now been referred to Carb's disciplinary panel.

In May, Ernst & Young lost its High Court bid to halt the investigation into its conduct as auditor to Anglo Irish when dealing with alleged inappropriate loans to directors of the bank.

In a statement, Ernst & Young said it "fundamentally disagrees" with the opinions issued by John Purcell that there is a prima facie case to answer on three points under investigation.

"This is a preliminary stage of the process and, for the avoidance of doubt, there has been no adverse finding made against Ernst & Young in respect of the audit of Anglo Irish Bank" the company said, adding that it will "vigorously defend" its work before a hearing of the disciplinary panel.