E&Y sued over Anglo Irish Bank collapse

Ernst & Young is being sued by the former Anglo Irish Bank for its conduct leading up to the bank's collapse in 2009, in what Irish media is calling a "watershed moment"

This is the first time an Irish bank has ever sued an auditor over its role in the financial crisis.

The former Anglo Irish Bank, which is now Irish Bank Resolution Corporation (IBRS), said in a website statement that proceedings had been started against E&Y relating to "the role of Ernst & Young as auditors to Anglo Irish Bank pre-nationalisation," but said it would be inappropriate to comment further.

E&Y said it was aware of the proceedings, but also refused to elaborate.

In 2009, the bank was nationalised in the wake of the financial and property crash.

The rescue almost bankrupted Ireland, costing the country €23.9bn that was widely used by property developers to keep the country's housing market afloat.

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Comments

Independence    1 thanks

ROB BROWN 43 | | Permalink

would love to see the audit satisfaction regarding the independence on a ten year tenure???????

Cardigan's picture

AIB v Anglo Irish Bank

Cardigan | | Permalink

Although we sometimes like to tar all banks with the same brush, Anglo Irish Bank and AIB (Allied Irish Banks) are two separate banks.

Rachael_Power's picture

Thanks for pointing that out,

Rachael_Power | | Permalink

Thanks for pointing that out, it was an administrative error. Corrected now. 

Cardigan's picture

No problem    1 thanks

Cardigan | | Permalink

What's a typo compared to a banking fiasco which nearly bankrupted Ireland!

 

carnmores's picture

we remember Ansbacher    1 thanks

carnmores | | Permalink

and good old Charlie Haughey

Were Delotte the auditors of

Tim 59 | | Permalink

Were Delotte the auditors of RBS when it crashed?

This is not new. If one

N.Krishnaswamy | | Permalink

This is not new. If one examines the spate of scandals since the beginning of the century ,they are all under the very eyes of the BIG Fours only except perhaps some small audit of one or two.

These big fours do not audit the accounts or vouchers and only concentrate on presentation of the financial statements as could be ascertained from the various friends who prepare the accounts for these auditors to audit.

Even though the audit team can extract so many unaccountable entries, they could not raise their voice as their bosses are more interested in the fees rather than the good work and earnest reporting. They can always settle their wrong doings with the regulators by paying the moneys and they can go on  like this  for ever.

Now the disease of big fours are spreading in surruptious acquiring of the middle size firms by surrogate owenrship of small firms without the label of the BIG fours in the front but internally controlling the work, perhaps preparing the grond to face any adverse conclusion of the Competition  council.

AASB should delete the wording in the Audit report and revert to the old model:  

  1. These financial statements are the responsibility of the company’s management. Our responsibility is to express an opinion on these financial statements based on our Audit.

The probelm is that they do not express their opinion frankly.

One of the greatest wonder of the world now is that so many scandals have occurred but no penal actions like suspending the license of these firms have been taken on hand. Only if such serious action is taken, then  such drawbacks  in the auditing profession could  be reduced, if not fully eliminated.

Expectations Gap

Sucker4big4 | | Permalink

This to me looks like just another expectations gap issue.  Banks are large enough to understand what they are doing, it's not up to the Big4 to tell them what to do.  Auditors are not there to stop a company making bad decisions, all they do is express an opinion on the past and consider if there are any issues that mean the company will not be a going concern for the foreseeable future, a period that is not that long at all.  The only people who should really pay for failure are the failures themselves.  The auditors didn't tell them to lend more than their balance sheets could stomach nor to risky clients, that's where the real issue is.