Thursday 25 December 2014

Ernst and Young will 'vigorously defend' legal action taken by IBRC

Published 30/11/2012 | 05:00

Widely-criticised accounting firm stands by quality of its audit of bank which is taking it to court

ERNST & Young has vowed to "vigorously defend" itself against the legal action taken by the former Anglo Irish Bank.

It comes after management at the bank now known as Irish bank Resolution Corporation (IBRC) filed legal papers with the High Court in Dublin initiating proceedings against its former auditor.

"We have consistently said we stand by the quality of our work performed in the Anglo audit and will vigorously defend any such proceedings," a spokeswoman for the firm said yesterday.

Sources at the accountancy firm said they have still not seen a statement of claim setting out the specific grounds that IBRC plans to sue on, and that they have been surprised by the lack of communication from the bank prior to the papers being filed.

Ernst & Young was Anglo's auditor in the years before its collapse.

Along with the other 'Big 4' accounting firms it has been widely criticised for failing to spot the huge problems that eventually led to the banking collapse.

The legal papers filed by IBRC this week come just ahead of a time limit that would have prevented the bank suing over any actions of the auditors before December 2006.

Ernst & Young signed off on Anglo Irish Bank's accounts for that year on December 5.

It may be some time before any court hearings in relation to the case go ahead.

Ernst & Young's role at Anglo has already been the subject of an investigation by the Chartered Accountants Regulatory Board (CARB).

Evidence

That was done by former civil servant John Purcell, who found the auditors did have "a case to answer", but further disciplinary action has been delayed at the request of the Director of Public Prosecutions.

The DPP made the request because any such investigation will visit evidence that is also likely to feature in the upcoming trials of three former Anglo Irish Bank directors.

That is also likely to be true of the planned civil action by IBRC, which will also cover related issues.

There is considerable cross-over between each of those cases and the legal battle between IBRC and the family of former tycoon Sean Quinn, and all of those factors are likely to be weighed before IBRC and Ernst & Young meet in court.

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Irish Independent

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