Anglo board not warned about audit dangers
A chartered accountant who audited Anglo Irish Bank has admitted he did not tell directors they would be committing a criminal offence if they provided misleading information.
Professional standards say auditors may wish to give such warnings to company directors, but no such warning was given to the bank's board during the audit, the trial of former chairman Sean FitzPatrick has heard.
Mr FitzPatrick (68), of Whitshed Road, Greystones, Co Wicklow, has denied charges of misleading auditors at EY about the size of multi-million euro loans he had with the bank between 2002 and 2007.
Dublin Circuit Criminal Court heard letters provided to the auditors by Anglo's company secretary, known as letters of representation, contained details of the aggregate amount of loans directors had with the bank at the end of each financial year.
Prosecutors claim Mr FitzPatrick reduced his borrowings through temporary refinancing arrangements around the time of audits during the years in question.
Under cross-examination, EY partner Kieran Kelly, who audited Anglo between 2002 and 2004, said the practice was to inform companies about their legal obligations in a letter of engagement at the outset of an audit. He admitted no subsequent reminder was given during the course of the audit.
"We didn't do it. We were engaged with experienced directors. Our letter of engagement had that reminder in it."
Defence barrister Bernard Condon said to Mr Kelly: "You don't think you should have told them there's a risk of going to jail? Is that your position?"
Mr Kelly said that it was.
Mr Condon told the court he believed there were problems with the wording of some of the letters of representation and asked Mr Kelly if he had raised these issues with Anglo.
Mr Kelly said he had not done so as he had access to other material and was satisfied there was no contradictory information.
The case continues.